On Tuesday, 12,000 Twin Cities nurses will vote on a hard-fought contract deal with area hospitals and the impact of health care reform was a major, but largely hidden factor, in the negotiation talks.
The health care reform legislation enacted by Congress could hurt or help hospitals financially -- or both -- but the net effect is hard to assess.
"It's a little bit difficult right now to know exactly how hospitals will fare," said Jean Abraham, a health economics expert at the University of Minnesota.
Abraham said some changes could cut into hospital revenues, as well as changes that could add to it.
"There's going to be downward pressure on reimbursements for the Medicare and Medicaid programs," Abraham said. "But on the other hand, there's also going to be a large coverage expansion. So, there will be a subsequent increase in the number of people seeking care."
Abraham said it's impossible to predict with any precision the impact on hospitals' bottom lines. But in Minnesota, she expects it will be negative. That's because the state already has a relatively high portion of its population covered by health insurance.
Health reform won't bring many new paying patients through the doors, so Abraham said it was easy to understand the hospitals' strong opposition to nurses' demands for mandated staffing levels.
"It's not surprising that looking forward and looking at this contract, they're going to be concerned about making changes that are going to potentially add to costs, specifically around mandatory nurse-staffing ratios," she said.
“It's a little bit difficult right now to know exactly how hospitals will fare.”Jean Abraham, health economics expert
The hospitals say they have to prepare for an era of declining revenue and leaner, more efficient operations.
"We've got to be able to control our expenses and be innovative," said Maureen Schriner, a spokeswoman for the hospitals.
Schriner said the hospitals have good reason to expect a big squeeze on their revenue, especially as the government and private insurers try to drive down their costs.
She also said it's unclear how evolving models of providing health care -- such as expanded use of telemedicine -- may affect hospitals' staffing needs.
"We need to be innovative and recognize the environment we're in no longer allows unlimited spending," she said. "That era ended in the 1980s. We don't have unlimited spending anymore."
Across the bargaining table, the nurses union has been more optimistic about the impact of health care reform. Joni Ketter, director of organizing for the Minnesota Nurses Association, believes the hospitals will get stuck with fewer unpaid bills from uninsured folks using emergency rooms and she expects that as more people get insurance they'll use more hospital services.
"Health care reform will be bring millions of new insured patients into the system, and so I'm not exactly sure why the hospitals think their revenue will go down," Ketter said.
In their tentative deal with the hospitals, the nurses gave up their demand for strict nurse-to-patient ratios. The nurses argued the ratios were needed to improve patient safety. Nurses said the ratios could save hospitals money, but the hospitals contended the ratios would cost them at least $250 million a year.
In the end, the two sides said they would make a "renewed commitment" to work on staffing issues in the 14 hospitals through existing procedures involving nurses and hospital administrators.
University of Minnesota health economist Stephen Parente expects hospital revenue will fall under health care reform. He said the changes mean consumers will be responsible for more and more of the cost of their care, and that means they'll forego some medical services so they don't have to pay for them.
Parente said it's crucial for nurses and hospitals to go forward as partners -- not combatants -- as they cope with changes brought on by health care reform.
"The execution of all these health reform strategies that people have talked about in terms of improving quality of care absolutely require the nurses to be full partners in that engagement or else it's not going to work," Parente said.
The nurses vote on the tentative contract agreement on Tuesday. The results will provide a read on the extent to which the nurses and hospitals may be prepared to work together in addressing the impact of health care reform.