Issue 10 - Swedish Looking Forward to Working Creatively with SEIU to Find a Fair Solution – Three P

Issue 10 - Swedish Looking Forward to Working Creatively with SEIU to Find a Fair Solution – Three Potential Solutions Discussed Today

In order to ensure a thriving future for Swedish, SEIU must share part of the burden for reducing expenses over the next three years. Swedish presented three potential options to show areas where SEIU could identify opportunities to narrow the gap and reduce expenses over the next three years. Potential solutions include:

There are various ways that we can combine some of the suggested expense reduction ideas listed above. Swedish talked to Union representatives today about how to mix and match these different scenarios to come up with a solution that is fair for all who rely on Swedish – patients, employees and community.

  • Limiting increases to the wage scale
  • Holding step increases for 1 – 3 years
  • Modifying the existing health care plan
    • Increasing premium share for employees and dependents
    • Fully developing a robust wellness plan
    • Redesigning some elements of the existing health care plan
  • Freezing the pension or keeping it as is

Swedish is proud to be a leader in employee wages and benefits. We are not proposing layoffs or base wage cuts as have many other hospitals and local employers. We are committed to continuing to be a leader in wages and benefits; however, in the “New Normal” we all need to make hard choices so that we can remain financially stable.

Economic Impact of SEIU’s Proposals Add at Least $160 Million at a Time When Swedish Needs to Save $200 Million

As Swedish looks to reduce expenses by $200 million over the next three years, SEIU has put forth proposals that add more than $160 million over that same amount of time. SEIU proposals include:

  • SEIU’s economic (wages, premium pay, step increases) proposal adds more than $70 million
  • The staffing proposal adds more than $84 million not including OR, Cath Lab, SVNS and EDs
  • Floating proposal is still being analyzed but is expected to add significant costs

Margin Shrinking Faster than Expected

A few weeks ago we shared with you some data about our eroding margin. We just received our May financials, which show that we are below budget by $5.4 million or 3.6%. Our payor mix continues to deteriorate with May marking the fifth consecutive month of this downward trend. The most distressing piece of this news is our margin for May was just $187,000 or .01%. This means we barely broke even and as a reminder, our goal and a healthy margin for an organization like ours is 3%.

Unfortunately, these changes are not going away, this is the “New Normal.”

Swedish’s Eroding Margin March – April 2011

The Myth of the “Three I’s”


The Union continues to believe that the “Three I’s” are areas where Swedish can find additional savings, this is not true. Swedish has been transparent about its financial situation from the beginning. Here is more detail on the economic impacts of the “Three I’s.”

  • Issaquah – It is anticipated that Issaquah will operate at a loss through 2014, the term of the next contract. Even if Issaquah exceeds all of our expectations it is only nine percent of Swedish’s operating volume.
  • Investments – As a nonprofit, we must be responsible financial stewards of our investments. Our investments are critical to our financial standing, which is one of the most important things rating agencies look at when assessing our financial health. We are dedicated to being fiscally responsible stewards for the organization.
  • Investors – We reviewed the data presented at the bond meeting and confirmed that what we told the ratings agencies the same thing we told you, there are many risks. We invite you to look at the data available through the Washington Healthcare Facilities Authority Revenue Bonds. In fact, there are 27 pages of identified risks facing Swedish many of these are the same risks we identified for you earlier, including:
    • General economic conditions
    • Indigent care
    • Federal health care reform
    • Costs and restrictions from government regulation
    • Labor costs
    • Pension and benefit funds
    • Medicare / Medicaid

Looking Ahead

Bargaining will resume on Tuesday, June 28 and Thursday, June 30. Future bargaining sessions are scheduled for July 7 and 14.

Questions or Comments?

Thank you for the emails and comments we have received. We appreciate hearing from you even if you have a different point of view. Please feel free to submit questions or feedback to corporate.communications@swedish.org or here at www.swedish.org/negotiationnews. 

Comments
Swedish Bargaining Team
First Hill RN:

Swedish shares the same financial story with all of our stakeholders – investors, donors, employees and patients. The data presented to rating agencies at a recent bond meeting is no different. We invite you to look at the data available through the Washington Healthcare Facilities Authority Revenue Bonds. In fact, there are 27 pages of identified risks facing Swedish many of these are the same risks we identified for you earlier, which include:
o General economic conditions
o Indigent care
o Federal health care reform
o Costs and restrictions from government regulation
o Labor costs
o Pension and benefit funds
o Medicare / Medicaid

Our financial health is just one of the factors considered by the rating agencies; other important considerations are confidence in management, our short term and long term strategies as well as our plans for growth and financial stabilization.
7/1/2011 5:14:21 PM
Manon
Let's not forget the hard work all of us "service" union members do. I have worked for Swedish over 6 years and between all the benefits premium hikes, orca card payments and union dues, I still bring home almost the same pay I did six years age. How are we supposed to survive in this economy with even more coming out of our paychecks. Come on Swedish your employees are the ones who have made Swedish the place it is, not the overpaid adminstration.
7/1/2011 8:47:57 AM
First Hill RN
Your statement "to be as transparent with our employees as possible", begs the question. How transparent have you been with your shareholders? What are we painting this week, 'gloom and doom' or roses?
6/29/2011 4:44:42 PM
Swedish Bargaining Team
Dear First Hill RN:

Our goal throughout these negotiation is to be as transparent with our employees as possible. The charts and graphs intended to help communicate the financial challenges Swedish is dealing with, they are not intended to be misleading. The charts and graphs are shocking, but they are generated using our actual financial data. Unfortunately, these are challenging times for healthcare and Swedish is not immune to these realities.

Swedish values its employees and that’s why we have been a leader in employee wages and benefits. We are not proposing base wage cuts, a choice many other hospitals and local employers have made. We are committed to continuing to be a leader in wages and benefits; however, in these challenging times we all need to make hard choices so that we can remain financially stable.
6/29/2011 11:52:14 AM
RN First Hill
This is the first negotiation that I can remember where the company has put out such misleading charts/grafts. If you want your employees to trust what you publish than be honest and refrain from publishing information that misleads. It appears as if you have hired some high-powered psychologist to bully and demoralize staff. This tactic is sure to backfire and cause more employee dissatisfaction. Be honest and give us a livable cost of living adjustment and don’t place the investment burden on the backs of your current employees.
6/29/2011 10:13:46 AM
annonymous
You guys keep talking about "generous" 401K and a "generous" dependability policy - come live in the real world down here and find out how "generous" it really is.
All Swedish has done the past 3 years is take from it's employees. First you started with items such as employee discounts in the cafeteria and holiday bonuses. Yes, these are fairly small items but these are HUGE morale killers. Secondly, the patients have been getting more difficult and Swedish refuses to step up and help take responsibility for allowing the nursing units to staff with what they NEED to help take care of THEIR patients, all Swedish cares about is the budget. And now ... and now Swedish wants to freeze our pension, freeze our pay, and force us to pay exorbiant prices for medical benefits. Oh, but let me applaud Swedish for their high quailty indicators. But wait ... who got you there? I am the one who greets YOUR visitors, I am the one who provides care to YOUR consumers, I am the one who has made YOUR quality indicators rise - NOT YOU! Yet, you are willing to take down those very employees that make you successful.
6/29/2011 9:58:34 AM
Swedish Bargaining Team
Ashleigh L. Thanks for your comments. We wanted to respond to your first post regarding the Pension. The Swedish bargaining team presented three different potential economic options for SEIU to consider; two of the options considered freezing the pension and converting to our 401K, one of them considered keeping the pension, but the impact on wages and medical benefits was more significant with this option.

As we seek an outcome that is fair to all, we cannot ignore the fact that only 2,308 of our 8,860 employees are in the pension plan, this just isn't fair. We have purposely designed our 401k to be very generous. Swedish contributes 5% of annual earnings to eligible employees as a company contribution to the 401(k) and matches 100% up to 2% of participating employee’s earnings.

The options presented yesterday were only options. They were intended to provide ideas for how SEIU could begin to look at making the hard choices needed to identify their fair share in helping Swedish reduce expenses by $200 million over the next three years. We look forward to hearing back from SEIU about their ideas for reducing expenses and contributing their fair share to the process.

We know the pension is a sensitive subject, but we believe that to be fair to all of our employees, it is something that should be considered. Two years ago, all non-union employees' pensions were shifted into a generous 401K retirement program to help preserve Swedish's financial stability and save full-time jobs. In is our belief that to achieve an outcome that is fair for all, the 2,308 employees still in the SEIU pension program now need to pull together and make the hard choice to preserve jobs and ensure that Swedish has a bright future.
6/27/2011 1:07:43 PM
employee
If Swedish is doing so badly with its profit margin may be the administrators who were paid multi millions of dollars can give their bonus monies etc back!! It is outrageous that those employees get such payments. For what? Putting Swedish into financial "hardship". And you expect the regular employees to pay more. I am a single parent. I don't have millions and you are asking me to put my son and self into fiancial hardship after the hard work I do at Swedish. Creativity does not mean you cripple the staff.
I do believe at a recent inservice we were told Issaquah would be supporting first hill yet you are now saying that it will not? Your stories appear inconsistant.
And i agree with the above statement- stop using "New Normal"! All that means if administrators get very wealthy and the staff and patients suffer.
6/27/2011 8:43:17 AM
employee
"Swedish Looking Forward to Working Creatively"

I hope Swedish gets very creative and creates a REAL offer!
6/25/2011 11:26:08 PM
val
i thought we are as important as police officers and fire department, you know never stop caring for or respecting our patients and co-workers. does this mean that issaquah new hires will get no raises also? can we get some respect here and dignity towards us please.
6/23/2011 9:37:56 AM
kara
I did see the Swedish options vote no on option A, vote no on option B, and vote no on option C. Get a real option from Swedish cause these proposals are a joke. Shame on Swedish for these options.
6/23/2011 4:50:52 AM
Ashleigh L
Sue you are right. I forgot that Swedish intentionally missed its contribution to the pension plan this year. Also, KUOW recently reported that we paid a physician more than $10million dollars -- and now he was rehired!
6/22/2011 1:49:52 PM
Sue J
I think management is overusing the term "New Normal". It appears in every single statement that is sent out to the employees. I for one, am frustrated with that term. Please stop the continued use of that term. Frankly, the "new normal" to Swedish seems to be the NEW building of, or the NEW acquisition of hospitals, clinics, and ED's. No wonder Swedish is worried about cash flow. They'd like us, the employees to pay - with cutbacks and a "frozen" pension - for their lofty investments. Frustrating.
6/22/2011 1:30:27 PM
Byron W
Is the Swedish Medical Plan "grandfathered" under the Affordable Care Act (Health Reform) If so, doesn't that restrict any real change to co-pays, deductibles or premium sharing? If not grandfathered, is Swedish planning on dropping coverage and simply paying the penalty?
6/22/2011 1:03:18 PM
Ashleigh L
This is distressing. In our 2008 Negotiations, Swedish Agreed to "never bring up the subject of the Pension again"- this is in writing in the contract. We don't have a VP of Quality or VP of Nursing at the table any longer -- We are professionalss and not "Doctor's Nurses". If it wasn't for our colleagues at SEIU, we would have no one advoating for us with Administration. The Pension is a tru differentiator and is intended to reward those of us who want to devote our career to Swedish. We took Swedish at its word in 2008, and it appears that we were misled.
6/22/2011 12:50:43 PM
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