Posted 3 months ago

Tidbits I learned about the business of healthcare as a union delegate

When I was on the union bargaining team of the hospital I worked at, I got to learn a lot of things. In fact, I highly recommend if you have any interest in business that you join and become active in your union. It is a source of free business education. Plus, you get to annoy/educate the other union members and organizers (shop stewards) with your ideas – like H S A is a good thing. And you will soon figure out what your future employees actually care about.

Each bargaining there seems to be one thing that we end up talking about in regards to the finances of the facility. One round (I was on about 4 or 5 contracts/bargaining teams.) we talked about the hospital industry expected savings. There are ways that hospitals and medical facilities are rated. One of these is how much cash reserves they have. The minimum is to have something like 120 to 180 days of operating expense set aside. When the facility starts to fall below a certain point, the feds can even come in. The reason it was brought up this particular session was that our facility was down to about 56 days in savings to cover operating expenses.

Our payroll alone was either 2 or 5 million a month, and we weren’t all that big.

The second thing I would like to bring up is the free services. One of the bargaining sessions we talked about how the amount of charity changed with the ACA. Our charity went from 10 million a year down to 3 million a year. There is a significant tax advantage to charity for the facility, but it is unpredictable as every charity app is unique and there is no set number you can receive or set cost for the services the charity is requested for. And this was prior to a shake down from the state that made changes to make the charity application process for all Washington State health care more accessible and standardized for anyone operating here.

I am not trying to be pro or con about the profit margins of a hospital or medical facility. Another bargaining we found out a facility had 2 billion sitting in the bank. At some point, the numbers don’t add up for what the argument is from the other side of the table. With all the talk of Medicare for all and people on BP just wanting to understand healthcare, I thought it would be interesting to provide a few tidbits on how the business of healthcare can be different then a regular business.