As health systems have grown through mergers and acquisitions, some have had to contend with how to set workplace policies from state to state. An expansive geographic footprint can mean facing a tangle of labor laws, including those concerning minimum wage, sick leave, discrimination prevention and workplace safety.

Many health systems must also consider the role union contracts play at their facilities when establishing benefits, wages and other policies. Healthcare organizations with a large hospital portfolio have adopted a variety of strategies to bolster workforce satisfaction and ensure compliance with collective bargaining agreements at their facilities during and after the expansion process. Some prioritize autonomy at each of their hospitals, where team leaders create policies and negotiate benefits with unions based on workers’ unique geographic needs. Others have sought consistency across the company to try and maximize efficiency.

Regardless of tactics, leaders say clear messaging is key.

“What we always find is if you don’t communicate and anticipate questions, then people will naturally arrive at their own conclusions,” said Ben Carter, executive vice president and chief operating officer at Livonia, Michigan-based Trinity Health, which comprises 88 hospitals across 26 states.

Labor experts advise health system leaders to consider whether a hospital’s nurses, providers or support staff are unionized when weighing a potential expansion. By federal law, the acquiring system must recognize the union and, if it’s an asset deal, can either accept the existing contract or negotiate a new one. A buyer that directly acquires a company’s stock from shareholders must accept existing contracts.

Jill Lashay, a labor and employment attorney at Buchanan Ingersoll & Rooney, recommends acquirers seek outside legal counsel when getting involved with a unionized seller. She also said staying well-versed in the terminology unions use, their rights, and the issues they care about most will lead to a stronger relationship down the line.

In her experience, the buyer will always ask the seller what its labor relations look like and whether there are any active disputes with the union.

“The buyer and the seller would really not sit down and have a conversation with the union until they’re pretty close to done on the deal because anything can fall through,” Lashay said.

Employee advocates say they want leadership to communicate with staff throughout a combination’s process—not just as deals wrap up, said Leslie Frane, executive vice president of the Service Employees International Union, which represents 2 million workers in healthcare, education, law enforcement and other industries.

“Where there are mergers or acquisitions, the employees are often the last to know and that is damaging to the employer-employee relationship. It diminishes trust and puts employees on defense where they have to react to change rather than be part of a process of change,” Frane said.

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Some experts argued non-unionized facilities could look more appealing to prospective buyers. Companies may be eyeing less-regulated markets to bypass administrative hurdles and avoid potential legal conflict, said Rex Burgdorfer, a partner at Chicago healthcare consultancy Juniper Advisory.

“I think buyers would say they want flexibility into the future,” Burgdorfer said.

On the other hand, health systems looking to purchase a unionized hospital might see valuable opportunities. Tim Garrett, a labor and employment attorney at Bass, Berry & Sims, said a company may look at a unionized facility and think its current management isn’t enforcing policies outlined by a collective bargaining agreement in the best way.

“Sometimes management isn’t properly exercising its rights under the collective bargaining agreement and is being too lax,” Garrett said. “A buyer may say, ‘I can tighten things up a bit here, even in the constraints of having a collective bargaining agreement.’ ”

Local autonomy for hospitals

Renton, Washington-based Providence says when it looks to expand its footprint, a unionized facility has its perks.

“I think some might portray unions in an adversarial way to management, but we see our outcomes as very aligned in Catholic healthcare,” said Greg Till, chief people officer at Providence.

“On almost every measure that I’ve seen at least, a more engaged workforce with more agency, meaning having a say in their work, produces better outcomes on every aspect of the Quadruple Aim,” Till said, meaning better health outcomes, cost reduction, patient experience enhancement and workforce satisfaction.

When a hospital joins the Providence system, Till said it accepts the union’s existing contract and renegotiates upon expiration. But in special cases, it reopens contracts. He said keeping an open dialogue with workers—even before it’s time to renegotiate a contract—is critical for expediting the process.

“If you’re not in constant partnership and communication, then the relationship dies and it makes the negotiation of those contracts a little bit more difficult to close,” Till said.

Jane Hopkins, a registered nurse and president of SEIU Healthcare 1199NW, which represents nurses and other healthcare workers at six Providence-affiliated hospitals, said the union used to have a more contentious relationship with management. After employees went on strike in January 2020 during contract negotiations, the two groups agreed to work together, with an eye toward equity and racial justice, she said. She described the relationship as transparent, with union members meeting with hospital leaders monthly to discuss labor issues.

To manage 52 hospitals across seven states, Till said Providence practices subsidiarity, meaning it operates as an organization of separate employers. He recommends having an on-the-ground human resources team at hospitals and divisions to stay on top of evolving state and county labor-related policies while keeping upper management informed. Union contracts are negotiated at the local level, with leaders at each hospital responsible for communicating any changes.

“Our total rewards [including benefits and compensation] and a lot of how people perform the work can be negotiated based on what those folks need. … What might be important to a population in rural Montana is probably different than the population in Anchorage, Alaska,” Till said.

Keegan Fisher, chief human resources officer for Providence Swedish’s north division, oversees facilities in the Puget Sound and Alaska markets. Within his division, there are 29 collective bargaining agreements across more than a dozen hospitals.

“Each of those collective bargaining agreements has nuances that make them specific to their local hospital,” he said.

Fisher helps align hospital policies and union contracts with Providence’s metrics for success, including improving employee retention and staff engagement.

“As the divisional HR leader, I ensure that we’re moving in the same direction, but also that each unique location is able to respond to the challenges or crises they are seeing,” Fisher said. Using a digital scorecard, his division tracks labor issues and outcomes human resources teams need to address. The platform allows them to stay in the loop about topics with which labor unions want leaders to engage.

A changing economic landscape could be a reason to adjust policies at the local level. Providence Swedish, which became affiliated with Providence in 2012, reopened its contracts with more than 7,000 Seattle-area workers represented by SEIU Healthcare 1199NW a year before they expired, after it became clear employees weren’t being paid market-competitive rates.

“We knew it was not going to be attainable for [the hospitals] to have safe staffing without doing something drastic,” Hopkins said. “It wasn’t a surprise when [management] said we’re behind the market and we need to be where we used to be, which is in front of the market.”

After negotiating for about six weeks, the hospital and union reached an agreement in September, increasing salaries over two years 21.5% or $6.50 per hour, whichever is higher.

Till said local autonomy was also helpful at the beginning of the pandemic. Leaving the decision up to individual facilities of whether to enforce a COVID-19 vaccine mandate accommodated staff in different states. The system’s affiliates negotiated the details of implementing requirements for unionized employees, including giving them time off to get their shots.

But making facility-by-facility decisions sometimes thwarts efficiency when the company does want to set up system-wide policies. Although Till said local autonomy can inspire creative solutions, Providence had to wait until the federal government established a nationwide vaccine mandate for healthcare workers in order to eventually enact rules throughout the organization.

The Providence system also opened union contracts at each of its facilities when it announced in September 2021 a $1,000 COVID-19 bonus for staff.

“We had to go contract-by-contract and talk to all of our labor partners to make sure that they were OK with their unionized caregivers also getting a bonus,” Till said. He added that some unions didn’t accept the bonus because they couldn’t reach an agreement.

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Consistency throughout the system

At Morgantown-based West Virginia University Health System, which spans four states, Chief Human Resources Officer Leeann Kaminsky said staff benefits, paid time off and compensation are often top of mind as it acquires a hospital—unionized or not.

“We have conversations with new employees as we’re getting ready to take over or acquire the hospital. What people want to know is, ‘What’s going to change for me and how is this going to impact me?’ ” Kaminsky said.

In 2018, WVU Medicine leaders proposed the idea of harmonizing benefits, not including wages, across its 17 hospitals. Kaminsky’s team did a comparative analysis, weighing which benefits were offered at each facility and what would change after aligning policies. It also took local laws into consideration.

“There were winners and losers in all different categories in terms of this hospital might have had a higher level of coverage, or this hospital might have had a higher level of [paid time off], and this one might have had separate sick time,” she said.

But the move to consistency aids administration and staff alike, she said. It makes it easier for the administration to manage policies more efficiently, while allowing employees to stay on the same plan if they transfer to another WVU hospital.

The system waited for contracts to expire before negotiating its new, consistent benefit plan with unionized staff. All unions but one agreed to the benefits change, which Kaminsky called “a feat.”

Kaminsky said the union that didn’t agree to the change opposed how costs are allocated to employees for premiums. She added that when it comes time to reopen the contract for that union, which the system declined to name, the WVU Medicine team will propose the plan again.

For systems looking to implement similar strategies, she recommends getting feedback from unionized and nonunionized stakeholders who will be affected by a policy change before reaching a decision.

“You want your leaders of the organization to believe that these are good changes and good benefits that are going to be put in place, because the reason that you offer the good benefits package is to help recruit and retain your employees,” she said.

Trinity Health has been working through an acquisition of a unionized facility, which the system declined to name due to ongoing negotiations, this year. During deals, transition teams at the health system communicate changes in compensation and benefits to staff at the facilities being acquired. They also create timelines showing when the changes will roll out.

Health system leaders emphasized if management isn’t communicative, then misinformation could spread among staff. John Schwartz, senior vice president of human resources, says he’s met with the union president representing workers at the new hospital, outside counsel and the entire union committee to talk about their level of comfort with the transition and what they can expect.

“We really work hard to make sure that they know me by name, they have my cell phone number, and we can always have a conversation if there’s concern,” Schwartz said.

The health systems agree that using clear approaches to communication before, during and after mergers and acquisitions will lead to better outcomes for both the employer and employee, while also facilitating better care.

“Any organization that has colleagues represented by a labor organization is going to have conflict from time to time. It’s how you resolve it, it’s how you approach it, and we’re all going to have disagreements,” Schwartz said. “It’s our goal to listen to our colleagues and make sure we’re doing right by them and following the contract we negotiated.”

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