Some 250 Straub Hospital & Clinic employees will vote July 30 whether to become members of the International Longshore and Warehouse Union Local 142.
Those affected include medical assistants, nurses’ aides, EKG technologists, ward clerks, critical-care technologists and radiology clerks.
Some employees say Straub is trying to dissuade employees from joining the ILWU.
“At one point, they displayed $400 worth of groceries to show us what we’d be losing because of union dues we’d pay if we joined the ILWU,” says Shirley La`a, a nurse’s aide at Straub.
Straub spokeswoman Michelle Jerin Shirai denies the organization has attempted to discourage employees from joining the union.
“There’s no pressure, but information was given.” she says. “We are just informing employees of their options.”
Last month, the newly formed Straub Employees Organizing Committee launched its own newsletter, called “Laulima.” It also plans to hold an employee rally in conjunction with the ILWU at 4:30 p.m., July 16, at Thomas Square.
In its 75 years of existence, Straub has been one of the few medical facilities in Hawaii to remain nonunion. That began to change last year when its registered nurses voted in favor of representation by the Hawaii Nurses Association.
The contract remains unsigned as the HNA negotiates final details with Straub management, according to Marion Marsh, HNA director of collective bargaining.
The union vote comes just as Straub is experiencing a number of organizational and financial problems. The company has announced it will lay off 42 employees in the next 60 days, and will close some of its clinics.
Last year, Straub laid off 150 workers and contracted out a number of positions to private companies. It also cut workers’ pay by 3 percent.
Now, in the face of declining revenues, its physicians will take 10 percent to 30 percent pay cuts, according to Straub representatives. Other cost-cutting measures, as yet unconfirmed, may be taken.
Talk also persists of a merger or collaboration with Queens Medical Center to help streamline services and cut costs. Straub management would confirm only exploratory talks about a possible collaboration.
Some employees say problems at Straub began when PhyCor Inc., a Tennessee-based practice management company, bought out Straub’s physician/owners in 1997.
At the time, Straub, like many other hospitals and health-care providers, was experiencing major reimbursement cuts from insurers and having difficulty controlling ever-increasing costs.
A corporate partnership with PhyCor seemed to offer the help needed to restore the organization’s financial health.
PhyCor is the second-largest practice management company in the country, with annual revenues of more than $1 billion.
Typically, practice management companies buy a physician group’s assets, such as real estate and equipment, for $250,000 to $500,000 per doctor. Currently, only about 7 percent of the nation’s 600,000 doctors are affiliated with such management companies.
In return for a fee of 12 percent to 15 percent of profits, these firms manage tasks such as billing and insurance claims; seek economies of scale; and help with expansion. In Straub’s case, physicians also received PhyCor stock.
But in the past year PhyCor stock prices have dropped considerably. In October 1997, the company’s stock rose above $40 per share. On July14, it was selling at $6 per share.
PhyCor has had problems applying its brand of corporate discipline to physician groups elsewhere in the country. For example, 150 doctors at the Holt-Krock Clinic in Fort Smith, Ark., sued in 1998 to renegotiate or dissolve their relationship with PhyCor. At the time, they said the company wasn’t doing enough to justify its management fee of 15 percent of profits. And, with government and commercial reimbursements dropping, many physicians saw their incomes plunge.
Specifically at issue was a clause that forbade doctors from setting up competing practices within a 30-mile radius of Holt-Krock Clinic for 18 months. Eventually, doctors offered to buy back the clinic from Phycor for less than what Phycor had paid for it. They argued that the clinic was worth less because they were now being paid less than when they sold the practice to PhyCor.
A PhyCor-managed group physician practice on Maui experienced its own organizational and financial problems.
Reportedly, in an effort to cut costs, PhyCor withheld the last paycheck of 1998 from physicians at Maui Medical Group Inc. In addition, it gave termination notices to 30 employees at Maui Medical in the last two weeks.
Some employees say the PhyCor takeover at Straub has resulted in staffing cuts, low morale and equipment problems. Some also contend that quality of patient care has suffered – a charge Straub’s administration and physician leaders deny.
Spokeswoman Jerin Shirai contends patient care has not been compromised because of layoffs or financial problems.
“No hospital staffing levels have been affected,” she says.
Jerin Shirai confirmed that 70 employees have been laid off since the beginning of the year – including the recent 42. But, she says, it’s not unusual for hospitals to make staffing-level adjustments on an ongoing basis.
“Any health-care organization will adjust its staffing needs,” Jerin Shirai says. “In fact, we’ve hired 120 people since the beginning of the year.”
She also notes the organization has spent $14 million on equipment in the last 12 months.
