## 

## Minnesota Hospitals Case Study

Gretchen Weismann

Center for Urban and Regional Policy

Northeastern University

######### Introduction 

In 1984, during contract negotiations between the Minnesota Nurses
Association (MNA) and a multi-employer hospital bargaining group, 6,300
nurses at 16 hospitals went on strike over job security. The largest
nursing strike in the United States, it lasted 39 days. Now, fifteen
years later, hospitals and nurses in the Twin Cities are making history
for the second time.

In October of 1999, hospital administrators from the HealthEast Care
System and Childrens Hospitals and Clinics in St. Paul signed
Transition Agreements with the Minnesota Nurses Association that would
allow nurses from both hospitals to remain in their current positions or
to transfer to a newly constructed, co-owned hospital in the fast
growing suburb of Woodbury, Minnesota. The Transition Agreements would
protect nurses who transfer to the new Woodwinds Health Campus by
permitting them to maintain seniority status, accrue benefits, and
return to previous positions at their homehospitals, should the
facility fail to organize. In essence, this agreement offered employment
opportunity to unionized nurses in a hospital that was not yet open
while protecting their job security in their current place of
employment. What is even more remarkable is that these Transition
Agreements, and in fact the entire development of the Woodwinds Campus,
from nursing care design to employee benefits, are the products of a
joint Labor-Management Committee representing one union, two employee
bargaining units, three hospital systems, and five hospitals. Whatever
would happen to the organizing drive at Woodwinds, the new agreement
paved the way for a new way for labor and management to work together in
the Minneapolis-St. Paul hospital sector.

How did MNA nurses and the hospitals bridge the divide to form a joint
partnership? What we call best practices describe the actions and
processes that constitute the \"joint labor-management partnership\"
between the hospitals and the MNA. These best practices evolved as
confidence in both the process and the relationship increased and
additional collaborative efforts were successful. A third party from the
Federal Mediation and Conciliation Service (FMCS) played a crucial role
in the success of the relationship at every stage of its development.
Beginning with committed hospital administrators, there arose an
abundance of enthusiastic leaders from labor and management who were
willing to invest time and resources in developing a new relationship.
The presence of a working joint labor-management relationship at the top
became the best recommendation for cooperative practices in the
workplace, especially when employees can see that it is paying off in
terms of the quality of life they enjoy as health care practitioners.
This quality, the parties believe, is transferred to their patients and
ultimately contributes to the financial stability of the hospital.

**The Best Practices**

At both hospitals the institution of joint labor-management
relationships began with the establishment of **Labor-Management
practice committees** that included hospital administrators and nurse
representatives. In 1995 and 1998 the hospitals and the nurses union
used **Interest-Based Bargaining** to negotiate their contracts.[^1]
Over time, the number of labor-management committees increased and
committee members adopted more formalized **IBB problem-solving
techniques within committees** to complement the joint partnership. In
1999, the hospitals and the union created a unique three-way
partnership to navigate the formation of a new hospital, Woodwinds
Health Campus, jointly owned by HealthEast and Childrens. Prior to the
opening and attempted union organizing drive at the new hospital, the
**Woodwinds Labor-Management Committee** crafted a **Letter of
Understanding and Transition Agreements** for MNA nurses who would
choose to become employees at the new Woodwinds facility.

**Importance of Third Party Role of FMCS mediators**

The complexity of the health care delivery system and the continual
reconfiguration of Twin City hospital organizations required a highly
skilled and well-respected third party. The third party needed to
understand and appreciate the economic and political environment and
interests of multiple constituencies in order to guide the parties
through training, labor negotiations, and mediation to a new joint
relationship. The Federal Mediation and Conciliation Service
commissioner who was asked to provide this guidance played many roles
and was able to win the trust and commitment of both labor and
management. FMCS provided training in IBB for collective bargaining and
for the Labor-Management Committees, facilitated the contract
negotiations, provided mediation and consulting services, and
facilitated agreements between the MNA and the hospitals at the new
Woodwinds campus.

**Two-way acceptance of practice  Trust and Communication**

The development of a joint partnership is predicated on and sustained by
a two-way acceptance of the process. Both the hospitals and the MNA had
to be willing to relinquish some old practices and demonstrate their
commitment to the new relationship. The Hospitals offer to pay for MNA
representatives time on joint labor-management committees was an early
indication of their engagement. For their part, the MNA accepted
managements overtures and worked to bring the membership into the joint
process through the development of joint labor-management communiqués,
training manuals for labor-management committees, and positive feedback
during negotiations and on the hospital floor.

**Training and on-going maintenance of the joint relationship**

The organizational structure of the committee system provided a forum
for the practice and expansion of the joint relationship. However, IBB
processes require extensive training and a great exchange of information
within labor-management committees and among the parties during
negotiations. Without adequate investment in resources and training, a
mere structure cannot support the communication, trust, and new skills
needed for a joint relationship. The joint relationship is like a
marriage. Renewal of commitment and attention by the parties are
necessary if the relationship is to move beyond institutionalization, to
a successful and long-lasting partnership.

This case study describes the history between the two parties and their
transition from traditional adversarial relationships to Interest-Based
Bargaining (IBB) to a system of labor-management committees that use
problem-solving techniques on a daily basis. With the on-going
assistance of mediators from the Federal Mediation and Conciliation
Service, MNA representatives, nurses, and the hospitals forged ahead
with new labor-management practices in Minneapolis-St.Paul hospitals.

**Twin Cities Health Care Environment**

The cost-saving efforts of local HMOs have had a profound effect on the
Twin Cities health care environment. The Minneapolis/St. Paul region led
the nation in the transition to managed care and in the proliferation of
health maintenance organizations, which now enroll an estimated 76.6
million people in the United States. The first regional HMO Group
appeared in 1957, followed in 1972 by MedCenters, a physician group that
formed in response to local employer interest. During the 1970s, as the
popularity of managed care increased, membership in seven
Minneapolis/St. Paul HMOs grew at an annual rate of 27 percent,
enrolling 12.4 percent of the regions population by 1978. By 1999, 60
percent of the Twin Cities population was enrolled in an HMO. To contain
costs and thereby maintain profitability, Managed Care organizations
select hospitals with lower patient-care costs forcing hospitals to
compete for scarce health care dollars by cutting lengths of stay.

Federal and State government policies have further aggravated hospitals
strained financial positions. In 1983, the Prospective Payment System
for Medicare significantly reduced hospital reimbursements encouraging
further decreases in in-patient hospital stays. Patients admitted for
knee surgery, for example, once required a 3-week in-patient recovery
period; they can now be discharged within 24 hours. In 1992 Minnesota
passed legislation favoring integrated service networks that combined
insurance with patient care. As a result, several area hospitals
partnered with insurance companies, increasing the power of the Twin
Cities larger hospital systems.

The continued growth of managed care in the 1980s and 1990s brought
organizational changes within most Twin Cities hospitals. Increasing
competition forced hospitals to apply new cost saving strategies that
included work re-organization, the shifting of some care onto patients
themselves, hospital closings, and finally mergers that created
multi-hospital systems. All Twin Cities hospitals are not-for-profit. By
1987 just four Twin Cities hospital systems dominated the health care
market, commanding half of all hospital admissions in the region. By
1992 just two HMOs had over 90 percent of all area HMO enrollment. All
hospitals, private or non-profit, must break even to survive. In this
increasingly challenging environment, twenty-eight Twin Cities
hospitals, more than one-third of the regions total number, were forced
to close between 1987 and 2000.

Although the services offered by hospitals -- physical care, health,
recovery, and at times life itself  are not always quantifiable, health
care is subject to the same economic pressures as other industries. This
tension defines the health care environment. Although hospital
administrators and nurses would be quick to say that health care costs
are primarily dictated by third party payers, in essence leveling the
playing field for all area hospitals, the history of labor-management
relations at Children's and HealthEast reveals increasing pressure on
hospitals to respond to this tension. In fact, because of the great
number of external factors that are beyond their ability to control,
hospitals are even more reliant on quality of care as a differentiating
factor in the health care market. To be successful here, they must
depend on their internal resources -- mainly their employees.

Thus, several factors are important driving forces behind institutional
decision-making in labor-management relations at the hospitals. The
managed care revolution, government regulations, negotiations for large
insurersbusiness, changing patient demographics, and technological
innovation are all components of the challenging, volatile external
environment. As a result of industry changes hospitals have faced
continuous pressure to do more with fewer resources. It is this "sink or
swim" environment that first challenged HealthEast and Childrens
hospital administrators to institute more cooperative relationships with
labor.

# The Actors 

**Childrens Hospital and Clinics St. Paul**

In 1923 Childrens Hospital St. Paul, a small 10-room house with 16
beds, was founded by Dr. Walter Ramsey, the first physician in the State
to argue that children are not miniature adults but belong in a realm of
their own. The Junior League of St. Paul, an organization of women
active in philanthropy, helped to raise start up funds for the hospital
which provided free care during the depression years. Years later, in
response to a growing need for space to accommodate pediatric specialty
care, particularly for children with acute diseases and newborns with
respiratory difficulties, the Junior League would again embark on a
fundraising campaign to help form a new hospital. In 1973, the present
day Childrens Hospital was built for \$14 million on land that became
available when two adult hospitals merged to become United Hospital. As
part of the financial arrangement, United and Childrens St. Paul agreed
to share many services including nutrition, housekeeping, pastoral care,
human resources, and facilities management, but were to remain separate
organizations with different missions, clientele, funding, and boards.

In 1994 Childrens Hospital of St. Paul separated completely from United
Hospital and merged with Minneapolis Childrens Medical Center. These
two hospitals and five suburban sites make up Childrens Hospitals and
Clinics. Employees of Childrens Hospitals and Clinics, with the
exception of some high level administrators who are systemlevel VPs,
identify themselves with either Childrens St. Paul or Minneapolis
depending on where they spend their working hours. This study focuses on
the employees of Childrens St. Paul (hereafter known as Childrens).

**Nurses**

There are 3,315 employees at Childrens St. Paul, including 1,436
Registered Nurses (RNs), 1183 of whom are represented by the MNA.
Full-time staff RNs, by far the largest employee group, comprise
approximately 35 percent of the workforce, followed by clerical workers
who represent 15 percent. In addition, there are 148 Nursing Assistants.
Managers and supervisors, who may also be non-practicing nurses,
comprise 4 percent of the hospital employee group. Ninety percent of the
nursing staff is female and the average age is just over 40 years.
Beside nurse managers and staff nurses (RNs) there are 30 LPNs (who
require a 30 hour training program, one of which is offered in the
hospital), 35 Pediatric RN specialists, and 25 neonatal specialists.
Many of the nurses at Childrens have spent their lives and their
careers working with children at this hospital. The turnover of RNs in
1999 was only 9.1 percent, compared to 15.4 percent of total workforce
turnover at Childrens.

**HealthEast Care System**

In 1987 the HealthEast Care System joined together several area
hospitals, including St. Josephs, St. Johns, and Bethesda hospitals.
St. Joes, founded in 1853, is the oldest hospital in the Twin Cities.
The hospitals were originally built and managed independently by the
Lutheran, Baptist, and Catholic churches to meet the needs of the
community in which each was established. In respect to its faith-based
beginnings, the HealthEast Care System still considers itself entirely
mission driven, with a primary responsibility to provide compassionate
care to the local community. Each of the individual hospitals maintains
an independent sponsoring board to serve in an advisory role to the
non-profit HealthEast Corporation. HealthEast also owns 12 outpatient
clinics, nursing homes, ambulance services and 80 percent of the new
Woodwinds Health Campus located in a suburb of St. Paul (Childrens owns
the other 20 percent). St. Joes is HealthEasts Cardiac and Cancer Care
Hospital, St. Johns is focused on Medical-Surgery, and Bethesda is a
Chronic Care and Rehabilitation hospital for longer-term patients,
including victims of permanent brain injury and spinal cord damage. In
total, HealthEast owns 1,219 licensed hospital beds \-- 401 at St.
Joes, 264 at Bethesda, 178 at St. Johns and 70 at Woodwinds.

**Nurses**

HealthEast employees number 6,665, approximately 22 percent or 1,515 of
whom are full-time RNs represented by the MNA: 517 work at St. Joes,
478 at St. Johns and 205 at Bethesda. Many RNs also work at
HealthEasts nursing homes, outpatient clinics, and HealthEasts
clinical centers. More than 54 percent of all full-time employees have
worked 5 years or more at their current hospital. The national nursing
shortage has left HealthEast with many unfilled positions for RNs and
LPNs as well as Clinical Nurse Managers and Nursing Supervisors. When
the new Woodwinds Health Campus opened in August of 2000, it hired 110
nurses, providing an additional challenge for hospital administrators.

For HealthEast, the impact of technological innovation has meant many
changes including a shift towards outpatient services and an attention
to limited resources, including the skill level of employees, and
particularly nurses, who are providing the majority of bedside care.
Advances in cardiac and cancer care technologies have increased demand
for these types of services. Other innovations have decreased the time
it takes to perform more complex operations, and along with hospital,
HMO, and government policies have decreased the amount of time that a
patient spends recuperating in a hospital bed. Therefore, patients who
are admitted are likely to be critically ill during their stay. The
demand for more intensive, highly skilled nursing care is concurrent
with HealthEast patients\' rising acuity levels. For the hospitals,
these highly skilled RNs are both essential and expensive. *An RNs
salary is more than 1 1/2 times that of an LPN and 30 percent of the
hospital\'s total budget.*

**Hospital Management**

Both HealthEast and Children\'s employ traditional top-down hierarchical
management styles. In the upper tier of management, Human Resources
Administrators, Vice Presidents of Operations and Patient Care, and
Medical Affairs Directors \-- along with other VPs \-- make decisions
about the broad direction of hospital policy. As hospitals have merged,
acquired other hospitals, and closed existing hospitals or opened new
hospitals, clinics and services, the parent organizations have
restructured senior management. Childrens Hospitals and Clinics in
particular, is adopting a systems approach that combines administrative
and personnel functions for Childrens St. Paul and Minneapolis. Despite
structural changes, most of the same people have remained in comparable
upper management positions for many years, lending a stability and
consistency to the hospitals policies.

The structure of middle management is defined by the particular floor or
unit of the hospital. On a day-to-day basis, Nurse Directors (sometimes
called managers) who work on each floor supervise the staff RNs. Within
the traditional structure nurse directors have discretion to make
decisions required during the course of a nursing shift. These nurses,
as unit level managers, have one additional supervisor, usually a
clinical nurse specialist serving as hospital-wide administrator,
between themselves and upper management. The director of nursing is
influential in decisions regarding staffing and scheduling as well as in
the handling of minor disputes and procedural questions, although there
is a great deal of autonomy and responsibility for the individual RN. By
law, RNs are held accountable for the medicines and care that they
deliver to patients. Staff RNs are also well-educated and highly
trained, holding the minimum of a 2-year associates, and increasingly a
4-year bachelors or masters degree.

**Woodwinds Health Campus**

The Woodwinds Health Campus, a brand new hospital in a suburb of St.
Paul, opened in August of 2000. The health care concept that defines
Woodwinds is captured by the hospital\'s unique statement of purpose,
vision, and values. It was the intention of HealthEast and Childrens
hospitals to combine their success with traditional medical practice in
their communities of origin with an innovative, creative hospital that
would recognize the changing nature of families and health care. To this
end they aim to be a patient-centered, employee friendly, comprehensive
provider of conventional and complementary medicine in a
state-of-the-art facility. The Woodwinds Health Campus offers adult and
pediatric primary and specialty care, including maternity,
rehabiliatory, emergency, and intensive care along with Laboratory,
Radiology, and Pharmaceutical services.

The facility is comprised of a 70-bed hospital, Inpatient and Outpatient
Surgery Center, and Heart and Lung Care Center. Woodwinds will provide
physical, occupational, and speech therapies as well as complementary
services such as acupuncture and herbal medicine, while the pediatric
clinic will offer mental health and asthma education services among
other specialties. Recognizing the dysfunctional aspect of the current
health care delivery model, with one administrative step, patients at
Woodwinds will be able to access a coordinated health care system
encompassing a primary physician, as well as a range of specialists and
services in a single location.

**Minnesota Nurses Association**

As the country transitioned back into a non-war economy in 1946, the
Minnesota Nurses Association (MNA), a professional association since
1905, began to follow its national organization towards collective
bargaining. Led by a young nurse named Aubrey Logsdon, who wrote an
article protesting the unfair treatment of nurses at Abbott Hospital in
Minnesota, treatment that included a 6  day work week and a policy of
docking nurses pay for any item that was broken during the course of
the shift, area nurses asked for and received voluntary recognition in
1947. The nurses primary concerns at that time were not significantly
different than they are today \-- higher wages and more flexible
scheduling. The first labor-management contracts with the MNA were
negotiated at St. Joes, St. John\'s, and Bethesda hospitals in St. Paul
in the 1950s. Then in 1953, nine hospitals in St. Paul came together as
a multi-employer group to bargain collectively with the MNA on a
citywide basis, an arrangement that expanded to include Minneapolis
hospitals and lasted until 1995.

**MNA Today**

The staff specialists currently assigned to HealthEast and Children\'s
have several years experience at their respective hospitals and are
influential in decisions regarding labor-management relations, as are
the state MNA directors. Still, those we interviewed were clear that the
MNA takes its direction from the nurse's group with which it is working.
For example, many MNA staff members were reluctant to try bargaining
more cooperatively until their nurses requested changes. One or two
individual staff specialists (business agents) from the MNA are assigned
to an area hospital every year to serve as a link between the union and
the RNs who elect their own representatives from among nursing staff.
Although the MNA leadership supports cooperative bargaining, there is
still some skepticism and a schism within the union between those who
embrace newer practices and those who believe that the nurses would be
better off using a more traditional form of bargaining.

**The Membership**

With 15,500 members, the MNA is the largest union at both Childrens and
HealthEast. It is also well supported \-- 80 percent of their RNs are
card carrying. At HealthEast, there are nine co-chairs (three per
hospital) and approximately 40 representatives serving the membership,
while Children\'s has 22 elected officials and up to three co-chairs.
Within the MNA representatives group, key members have always done most
of the work. As one interviewee comments, \"its like church \-- you
look around and you see all the same people in all the same pews.\"
Within the MNA nurse's group, decision-making is centered in the
bargaining units and with the MNA co-chairs who speak on behalf of the
staff RNs. According to the MNA, union meetings are and have always been
sparsely attended with the exception of the months between February and
April when the contract is re-negotiated. Despite the MNA chairs
assertion that most staff nurses are disinterested in most union
activity, a claim that is supported by limited attendance and
volunteerism among rank-and-file nurses, staff specialists remark that
under the old structure, RNs felt that they were often consulted only
after the fact. Inclusiveness has been a primary goal of the new
joint-labor management practices.

**Third Parties**

As a result of union penetration in Twin Cities health care facilities,
hospitals and unions traditionally negotiated area-wide contracts in
order to standardize employment costs. Nine different unions represent
health care workers in Minneapolis/St. Pauls 25 hospitals and 60
percent of all hospital employees belong to unions. At HealthEast, there
are six unions, including Local 113 Service Workers (SEIU), ADIT- X-Ray
technologists, the MNA, Local 70 Maintenance Engineers (IUOE), Local 789
(VFCW), and Teamsters Local 638 (IBT). The first four unions use
interest-based bargaining (IBB), while the latter two use traditional
bargaining. There are three unions at Childrens  the MNA, Local 113
Service Workers (SEIU), and Local 653 (VFCW) representing LPNs (there
are also three additional unions at Childrens Minneapolis). In this
context, employees of unions with progressive administrations exist side
by side with employees from more conservative unions. Each hospital
administration negotiates using both types of bargaining, alternating
between collaborative and cooperative relationships, and formal
traditional ones.

**Minnesota Hospital and Healthcare Partnership**

In addition to the MNA, several organizations were instrumental in the
coordination of citywide labor-management policy during the development
of this complex hospital environment, including the Minnesota Hospital
and Healthcare Partnership (MHHP), the trade association representing
the states 143 hospitals and 22 health systems. The Director of Labor
Relations at MHHP was the spokesperson for the multi-employer hospital
group during collective bargaining until the mid-1990s when several
hospitals left the employer group. Allina Healthsystem, the largest
hospital system with four hospitals and an eye institute, now sets the
defines the competition for other employers. Four hospital organizations
comprising nine hospitals including HealthEast, Childrens, North
Memorial and Fairview continue to negotiate together in coordinated
bargaining as they have since 1957.[^2]

**Metropolitan Hospitals Labor-Management Council**

In 1989, a regional organization, the Metropolitan Hospitals
Labor-Management Council (MHLMC), was established with a grant from the
Federal Mediation and Conciliation Service (FMCS) to support and promote
cooperation between labor and management in hospitals. The organization,
which was supported with contributions from the Minnesota State Bureau
of Mediation and member hospitals of the metropolitan multi-employer
group, promoted information exchange and education to area hospitals
until its demise in 1997. Past participants remarked that monthly MHLMC
meetings had been an effective way for them to keep informed of activity
in the cities hospitals and note that MHLMC\'s leaders were persuasive
advocates for new labor-management policies. In particular, Earl
Wilford, the director of MHLMC, was most supportive of cooperative
practices during his tenure. Since the early 1990s the trend across the
hospitals unions has been towards more collaboration and the use of
Interest Based-Bargaining for contract negotiations, although in the
past couple of years it has begun to shift back towards traditional
bargaining. Citywide, there are four unions that currently use IBB for
collective bargaining.

**Federal Mediation and Conciliation Service**

In an effort to change the labor-management climate in the bitter
aftermath of the 1984 walkout, the local office of the Federal Mediation
and Conciliation Service (FMCS) provided a grant to United and
Children\'s St. Paul Hospitals to hire a full time facilitator to assist
with labor-management committees. At first, the hospital and union
leaders chose to work on a few projects including efforts to reduce
absenteeism, improve communication, scheduling systems, and increase
access to educational programs for RNs. Over the next 15 years, FMCS
commissioners became trusted mediators, facilitators, and trainers for
all of the collaborative processes instituted at the hospitals. They
were called on to help hospital administrators and union leaders learn
and adapt to Interest-Based Bargaining for complex multi-employer
negotiations, to provide training sessions and materials for
labor-management practice committees, to facilitate joint working
groups, and to oversee the development of brand new labor-management
agreements.

##### **Traditional Labor Relationships before 1995**

MNA leaders and hospital administrators from both hospitals characterize
labor relations as cordial, but also stressful, positional, and
adversarial despite a limited number of outright disputes. One senior
staff specialist at the MNA describes the original labor relationship as
episodic and issue-related. Both sides were defensive and the
relationship between the MNA and management was characterized by
physical distance. The style of collective bargaining was traditional
and power-based with each side attempting to get more and give less.
However, HealthEast and Childrens have significantly different
labor-management histories. Nurses from Childrens St. Paul, along with
RNs from neighboring United Hospital, were the only MNA bargaining units
in the Twin Cities that did not participate in the 1984 city-wide strike
over job security.

**Limitations of early joint labor-management committees**

By 1987 two joint labor-management committees, the Staffing and Advisory
Committee (SAC) and the Health and Safety Committee were included in
metro-wide hospital-MNA contract language. These committees used an
early problem-solving model to create hospital-wide policy. Despite the
intention, both administrators and union officials note that the
specific procedures advocated by the Committees failed to produce any
substantial change in the style or form of labor-management relations.
For example, the HealthEast SAC attempted to deal with the ongoing
problem of staffing resulting from a fluctuating patient census by
floating RNs between units. The complexities of an RN\'s job, which are
often service-specific, made this an unsatisfactory solution.
Furthermore, the solution was reactionary, responding only to the
immediate need for coverage, and failing to address the larger issues
around staffing, care delivery, and RN skill levels. There appears to
have been a crucial lack of commitment to use the Committees to further
broad labor-management relations, in part because the committees were
not designed solely for this purpose. Another explanation is offered by
an RN who said that although she liked and respected people in
management, she could not trust them because they did not have any
relationship outside of the one in which they met once every two to
three years across the bargaining table. While these committees provided
an opportunity for exchange, committee members, unpracticed at
communication, were unable to use them to mutual gain.

**Collective Bargaining**

The hospitals bargained two-year contracts with the MNA until 1989 when
they went to a 3-year contract for the first time. Collective bargaining
agreements at both hospitals have contained a no-strike clause since
1974 when private hospitals began bargaining them into contracts after
national law superseded the states Charitable Hospitals Act. Although
contracts are detailed, issues that were not clearly instructed by
contract language often had to be dealt with outside the contract.
Contracts could not be revised frequently enough to keep up with
subsequent mergers and consolidations, and the accompanying changes
regarding seniority, transfers, lay-offs, and scheduling.

**Nurses\' Changing Demands**

According to employees at both hospitals and MNA staff, nurses
grievances have focused on staffing levels, discipline, and
jurisdictional issues, while contract negotiations centered on wages,
benefits and scheduling. Hospital administrators characterize the old
relationship as a list of economic demands. More recently, issues around
care delivery, and health and safety have been prominent. This emphasis
reflects changes in the industry including work reorganization, patient
acuity levels, and the proliferation of such infectious diseases as
Hepatitis and AIDS. To the nurse's group, consisting of the unit level
nurses, the MNA contract meant that they would get a substantial pay
hike, but everything else would remain the same. Likewise, in this
organizational structure, the MNA representatives were not directly
included or needed in most decisions, excluding written grievance level
procedures. During the collective bargaining cycle, attorneys did all
the talking. When managements attorney argued that they could not do
something for labor, MNA chairs went back to the nurse's group to \"whip
people up into a frenzy.\" Without other structures and means to
facilitate communication, single-minded adversarial action was the
nurses\' main avenue for expression.

**RN Grievances - Process and Reality**

In the traditional relationship, each hospital floor operated as its own
fiefdom, allowing nurse managers more authority regarding staff RNs. As
each floor provides unique services, each also had its own nursing
concerns and rules. Several RNs recognize advantages to this operational
structure, namely that nurse managers who have expertise in the work
being conducted on each floor have greater flexibility to implement
policies as needed. On the other hand, they concede that this system
frequently led to favoritism. Because of the authority of the nurse
managers, MNA-elected representatives and chairs were essentially
superfluous to day-to-day hospital decision-making and most on-going
problems were dealt with outside of the contract, if at all.

In the formal grievance structure established by contract, staff RNs
bring any work-related problem to their first level supervisor and if
unresolved, to an MNA representative or MNA Chair. Together as a group
they attempt to resolve the issue before holding a meeting with a
representative from the MNA and/or Human Resources. At the second stage,
an official grievance is filed with the MNA and with the hospitals
Human Resources department. Mediation is also offered as an option
before the final step of arbitration.

Changes in the number of grievances over time do not appear conclusive
regarding a sea change in labor relations. However, that RNs did not
follow the prescribed procedures suggests that earlier methods for
dispute resolution did not adequately address the nurses\' concerns. In
practice, staff nurses often by-passed the first stage and either called
the MNA staff specialist directly regarding the problem or were urged to
file a grievance immediately by their MNA representatives. According to
one veteran RN at HealthEast, the assumption was that any discussion
with a manager would be fruitless. Her impression was that the number of
grievances was much higher before the introduction of more collaborative
labor-management relationships because nurses had no other way to
express their discontent. An administrator at Childrens notes that
prior to 1992 there were approximately 50 percent more mediations a
year.

Some nurses described a different informal practice for on-going dispute
resolution and the grievance level that existed before the introduction
of cooperative practices. In this alternative scenario, many of the
day-to-day disputes focused on issues such as the scheduling of work
hours. Nurse managers were easily able to resolve any conflict here by
talking directly to the participants and referring to contract language
if necessary. In this way, the number of grievances was actually
contained by the informal resolution of problems. Between 1990 and 1999,
HealthEast had only one grievance that went to arbitration. Childrens
had only two \-- one in 1993 and another in 1996.

###### **The Development of Cooperative Labor Relations** 

On the surface, such a dearth of grievances would suggest a harmonious
labor-relations environment. Nonetheless, there was pressure to try
something different. At HealthEast the decision to move towards more
collaborative labor-management practices with the MNA involved a
confluence of events and circumstances. First, hospital closings and
mergers, financial pressures, the multi-union hospital environment, and
the enthusiasm and leadership of several area hospital administrators
paved the way. Then, commitment on the part of the MNA leadership to
take direction from their nurse's group made the partnership possible.
The story begins with a hospital merger.

**The Health East Merger - Navigating Consolidation**

The HealthEast Care System was born out of a need to reduce hospital
capacity. In the 1980s, many area hospitals were losing money due to an
under-utilization of hospital beds created by the cost-saving measures
of third party-insurers and advances in medical technology. Between 1980
and 1987 the number of patient days in metropolitan hospitals decreased
by nearly 1 million, while the average length of stay decreased from 7.5
to 5.3 days. The merger of several voluntary hospitals into the
HealthEast Care required an enormous organizational and cultural shift.
Along with their combined resources and personnel, each hospital brought
a different religious affiliation and mission statement, deep roots in
their respective communities and strong individual cultures.

Each individual hospital corporation owned additional service components
including ambulance companies and long-term care facilities. To meet
economic goals, administrations of these hospitals had to buy into the
same organization, focus on the kind of health care that would be
delivered by the slimmed down hospital system, and agree on which
hospitals would be closed, which services consolidated, and which
programs eliminated. The hospitals that became HealthEast also contained
their own labor management systems, workforces with unique concerns, and
different union representatives and relationships. The creation of
HealthEast required a synthesis of nine distinct union contracts. Midway
Hospital, for example, was not represented by the MNA while St.
Joseph\'s, the oldest hospital, was the least unionized overall.

**Surviving Economic Crisis and Closings**

Two years after HealthEast formed, its economic struggle intensified. It
took one year to recover financial solvency after a crisis in 1989
during which administrators announced that they were 10 days away from
bankruptcy. Annual reports show that net income went from a combined
deficit of \$74 million accumulated between 1987-1989 to a positive net
income of \$3.2 million in 1990. To cope with the economic crisis, the
board of directors brought in the Hunter Group, a turnaround management
team. The resignation of the CEO, CFO, and the VP of Physician Relations
soon followed. The new management team implemented organizational
restructuring strategies, as well as quality improvement and patient
care focus models. Administrators believe these contributed to the
hospital\'s financial comeback. This was also the year in which formal
labor-management committees were instituted at HealthEast. In these
early committee meetings, management made the decisions with some
limited input from the participating nursing staff members.

After the 1989 crisis, economic pressures continued to pose a challenge
to hospital administrators. The closing of Divine Redeemer Hospital in
1994, a 70-bed acute care hospital in St. Paul, immediately preceded the
use of Interest-Based Bargaining for contract negotiations in 1995.
According to management, the hospital closing entailed a very difficult
process and nearly 400 people were temporarily laid off. Still, within a
year, management was able to recall every employee displaced by the
closing of this facility. At the time, however, the future of many
employees\' jobs was unclear, the workers were miserable, and
management\'s hands were otherwise tied. The team approach apparently
worked. Many RNs began to recognize the hospital administrators
financial difficulties as their own. One RN from HealthEast said of this
tumultuous environment that we as employees began to have a vested
interest in seeing our employer succeed, even if that meant tightening
our belts and closing hospitals.\" Management realized that HealthEast
also needed the support of its nurses.

Management may have unintentionally provided the groundwork for the
acceptance and institutionalization of formal cooperative practices by
developing a positive relationship with staff during this turbulent
time. During hospital closings, management adopted a candid and
accommodating approach. As HealthEast was forming, administrations of
participating hospitals and the newly formed corporate system
administrators \-- particularly Human Resources departments \-- took
pains to be responsive to employees. A leader at the MNA remarks that
although nothing could take the trauma and insecurity away, HealthEast
attempted to conduct an orderly and open process by letting employees
know what their rights were, instead of making decisions from on-high
and leaving staff to fend for themselves as hospitals and services
closed and merged. An MNA staff specialist noted, \"They worked well
with us whether or not we had official labor-management committees.\"

**The Evolution of Cooperative Labor Relations at Childrens**

At Childrens, the development of more cooperative relationships
reflects a steady evolution towards the use of Interest-Based Bargaining
for the 1995 negotiations. After the strike in 1984, management made a
concerted effort to work on labor relations. The transition to
cooperation appears more seamless at Children\'s, where labor relations
were already stable and where Children\'s RNs, who were bargaining
separately from the multi-employer group, chose not to strike. At
Childrens no defining external factor caused hospital employees to
institute joint labor-management practices. However, there were subtle
changes in the hospital work environment as the merger of St. Paul
Childrens and Childrens Minneapolis took effect. Prior to 1995,
Childrens had been aligned with United Hospital and according to
Childrens nurses, when it came to labor negotiations we let United
nurses do our work for us. At the bargaining table, Childrens RNs were
a small minority. Instead of concentrating on the macro issues of labor
relations, nurses tended to focus on the community of their floor unit,
content with the level of input they could give during shared governance
or hospital unit staff meetings. Each unit followed its own practices
and RNs interacted with the MNA only when noticing dues on a paycheck or
when involved in filing a grievance. Then, when United and St. Paul
Children\'s separated into two different hospital organizations in 1995,
St. Paul Children\'s nurses were suddenly on their own at the bargaining
table for the first time in 30 years.

**Transition to Joint Practices**

In the face of continuous economic struggle and competitive pressures at
these two hospitals incipient labor activity in other unions throughout
Twin Cities hospitals stands out. Interest-Based Bargaining, a national
trend in cooperative labor practices, was introduced to hospital
administrators at a national labor conference in the late 1980s and
again in 1990 by local FMCS mediators[^3] Leaders in labor relations
also began to share ideas about the use of IBB during meetings of the
Metro Hospital Labor Management Council. In 1991 the SEIU local, which
included LPNs, service workers, and maintenance workers, and the Union
of Operating Engineers, decided to use IBB for contract negotiations.
The success of these negotiations prompted management to encourage the
use of IBB with all hospital unions. Administrators felt that IBB
problem-solving processes could help employees manage conflict in daily
interactions within the hospital and believed IBB would minimize the
potential for a strike.

In 1991 the MNA asked FMCS to present an overview of IBB for
representatives of metropolitan area nurses. After their first
introduction, the nurses decided not to use it for their 1992
negotiations. MNA nurses may have been cautious about adopting IBB for a
number of reasons. As a highly skilled and proportionately large
employee group, nurses were accustomed to taking the lead in negotiating
settlements. In terms of wage and benefit increases, the traditional
strategy appeared to be successful. In addition, in the early 90s the
leadership in some of the other unions had a stronger relationship with
hospital administrators and those unions were more amenable to
cooperative practices. Despite resistance, FMCS mediators continued to
encourage the departure from an episodic, adversarial method of
conducting business.

**Hospital-wide collaboration encourages the MNA leadership to try IBB**

In 1995, after extensive discussions between MNA leaders and hospital
management, the Twin City MNA RN chairs decided to accept IBB on behalf
of their membership. The MNA staff specialists, the same ones who had
resisted earlier efforts to change, suggest a reason for their eventual
switch to the more cooperative approach to collective bargaining: the
members of the bargaining committee were always frustrated with the old
process and had become sick and tired of the old ways of bargaining.
Hospital administrators, expressing a similar sentiment, were also tired
of being the bad guy.

Not insignificantly, when the MNA did agree to use IBB, the tools were
already in place \-- most of the other hospital unions were already
using IBB. Given the proliferation of cooperative relationships among
other unions and administrators at area hospitals, the MNA may have felt
increasing pressure to consent to the joint relationship. Likewise, the
practice of Interest-Based Bargaining was becoming increasingly popular
and success stories were exchanged among colleagues in labor management
relations. In the face of ostensibly positive change, the MNA
leaderships\' continued resistance would have required an explanation.

**Leaders of the new joint relationship**

The Vice President for Labor Relations at MHHP, Pat McDonnell, played a
key role in the hospitals\' transition to IBB. On managements side the
Vice Presidents of Human Resources at Childrens and HealthEast, Pat
Langan and Steve Sprint, along with Mary Pynn, an RN executive at
HealthEast, were the main advocates for new labor-management
relationships. All of these executives are long-term employees of the
hospitals, characterized by their dedication to the mission of the
hospitals they serve, esteemed by both their peers and the nurse's
group. One RN described the importance of the interpersonal relationship
to the nurses\' initial acceptance of IBB: \"these people bring a sense
of quality to the joint process, people listen to them and they have a
lot of respect in the organization. The administrators that championed
the IBB process had substantial experience in their jobs and in
traditional bargaining, as did several leaders from the MNA who worked
hard to garner the MNA memberships\' acceptance of joint
labor-management practices. Marilyn Cunningham, Karen Patek, and James
Bialke, senior staff from the MNA, were instrumental in helping to guide
the MNA towards more collaboration with hospital administrators, and to
manage issues that arose during the implementation of IBB processes. For
representatives of management and the union, the first challenge was
learning to listen to each other.

Even after they initially decided to use IBB, some MNA staff specialists
and nurses remained highly skeptical. One of the MNA representatives,
herself a member of the HealthEast bargaining committee during many
traditional negotiations, recalls her initial reaction of restrained
cynicism: if they wanted to do something different than that was fine
but I made it clear that I was \"not into any touchy feely stuff. Given
pervasive skepticism at the unit level, joint labor-management practices
first had to supply participants with a reason to change. This was
particularly true of the MNA membership for whom the existing
labor-management relationship produced at least inoffensive, predictable
results in the form of competitive wage and benefit increases. Instead,
the first FMCS-sponsored IBB training promised equally important but
less tangible results \-- deeper, broader agreements and a better
working relationship.

The FMCS training in IBB held in January 1995 just prior to the start of
contract negotiations clearly marks a turning point in the attitude of
many leaders in labor relations from both hospitals. Despite
managements early interest in IBB and the unions willingness to try
it, a great amount of uncertainty and doubt remained. Interest-based
bargaining requires trust. To really make the process work, both MNA
leaders and hospital administrators had to overcome negative perceptions
and entrenched behaviors.

**Joint Labor-Management Practices and the Role of Third Parties**

Joint Labor-Management relations at the Minnesota Hospitals reflect a
progression towards mutual trust and two-way communication, furthered by
specific practices that have helped the parties to establish more formal
mechanisms for collaborative decision making including joint policy
committees and contract documents. These practices include:

-   Establishment of joint labor-management committees

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-   Interest-Based Bargaining for contract negotiations, both individual
    and multi-employer bargaining

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-   Utilization of Interest-Based Bargaining problem solving techniques
    in hospital policy making committees

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-   Partnership between the hospitals and the MNA using IBB techniques
    and skills learned through the development of joint committees to
    negotiate pro-active, cooperative labor-management agreements in a
    new hospital

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-   Establishment of a temporary Joint Labor-Management Committee for
    Woodwinds Hospital

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-   Contract documents, including Transition Agreements and a Letter of
    Understanding between the MNA and the management at Woodwinds
    Hospital

> Throughout the evolution of the labor-management relationship, FMCS
> mediators played multiple roles. In particular, FMCS mediators were
> instrumental in training, facilitating, and managing each stage of the
> transition from the traditional to the more cooperative labor
> relationship.

**Interest-Based Bargaining in Contract Negotiations**

During the initial IBB contract negotiations with the multi-employer
hospital group the third party played the following roles: Detective,
Energizer, Facilitator, and Information Broker. In the following
sections, each of these roles is highlighted as it corresponds to the
events unfolding at the Minnesota hospitals during the transition to the
joint labor-management relationship.

**Knowledge**

When the MNA finally agreed to use IBB for their contract negotiations,
FMCS was ready to assist if called upon. Jeanne Frank, a commissioner in
the Minnesota FMCS office, was familiar with the health care industry
and the unique pressures placed on hospital employees. She had been
working with them since 1987, facilitating collective bargaining for the
multi-employer group and using IBB in 1992. She also worked with
HealthEast and Children\'s to mediate several disputes a year. In
interviews, many hospital employees referred to Frank's intimate
knowledge of the hospital environment. To effectively promote the
benefits of labor-management cooperation, the third-party trainer has to
speak to the tangible concerns and actual experiences of the workforce.
Therefore, the FMCS commissioner\'s knowledge proved crucial to the
employee buy-in required for the initial acceptance of IBB for
collective bargaining.

**Energizer**

In order to introduce IBB techniques to the bargaining committee
members, Jeanne Frank, Alan Langohr, George Buckingham, and Mary
Hosford, commissioners from FMCS, held a 3-day training session. Over
100 people attended including MNA staff specialists, MNA representatives
and chairs, nurse managers, and human resources and hospital operations
personnel. This training was a significant turning point in the
transition towards joint labor-management action. Participants from both
the MNA and management recall the experience with a mixture of
admiration and awe. Using role-playing, interest articulation, and
non-judgmental listening, the initial IBB training focused on
relationship building and trust. The intensity of the experience gave
participants the feeling that they had shared something
[together]{.underline}. They left transformed, with greater respect for
the process and increased amity towards the commissioners who made this
conversion possible. The 1995 IBB orientation acquired such epic status
that some employees who were not actually at the training nevertheless
talk about it with envy and nostalgia in interviews 5 years later.

**Establishing Ground Rules**

Several stages in the implementation process allowed labor and
management to engage each other in open discussions during the first IBB
negotiation. The first step involved bringing labor and management
together to discuss IBB during the training process. Second, IBB
concepts had to be put into practice during collective bargaining. The
FMCS facilitator played a crucial role by guiding participants through
early negotiating steps and carefully explaining how the IBB process
would work. As a fail safe both parties signed a written statement
agreeing to transition back to conventional collective bargaining and
specifying the transitional ground rules they would follow should the
IBB process break down. To counter lingering skepticism with new found
collaboration, the hospitals and the MNA agreed to equally share the
costs of contract negotiations when using IBB.

**Collective Bargaining with IBB**

In IBB bargaining the focus shifts away from union and management
attorneys to the members of the bargaining committee who, with the FMCS
facilitator, manage the meetings and coordinate IBB negotiation
processes through working committees. The first two bargaining sessions
are spent making committee assignments based on individual expertise and
interest. These committees include the language committees that
translate decisions into contract language, data committees that gather
statistics and provide cost-benefit analyses, and several additional
sub-committees that contain representatives from both labor and
management. Chairs of each committee have well defined tasks and
committees meet at specified times during the negotiations. Feelings of
confidence and trust necessary for later cooperation and compromise are
nourished as members of the joint committees discover and disclose
financial and other forms of information together and then present their
findings to the larger bargaining group as a team. For the facilitator,
the ultimate goal is to turn the meetings over to the committees and
their established chairs.

When learning new procedures, details matter. Instead of sitting across
from each other at the table and breaking into frequent caucuses,
participants were asked to sit side by side. With cynicism at a premium,
FMCS facilitators instructed the bargaining committee that the attorneys
would no longer do the all the talking, that each side would elect a
chair, and that they would all start communicating together as a
committee. A slow cultural shift occurred as participants adjusted to
the new operating procedures. They began to express their concerns in
their own voice. Social ties developed as participants shared jokes and
family stories with one another, creating a trust built on personal as
well as professional interactions. These relationships then continued
beyond the bargaining session as committee members began to socialize
together outside of work. Eventually, participants from labor and
management traveled to labor conferences together. These shared
experiences were momentous building blocks for future cooperation.

**Two Way Communication**

Information sharing is critical to the success of IBB processes and both
sides have to be willing to reveal their opinions and analyses. In the
role as a facilitator of IBB processes, the FMCS mediator does not offer
substantive content, but may provide alternative solutions. In modified
forms of IBB, the FMCS mediator can serve as both facilitator and
mediator. Often times, more difficult economic issues will require
mediation. According to one FMCS mediator, the flow between mediation
and facilitation mirrors the transition from Traditional to
Interest-Based Bargaining. In traditional bargaining the parties become
more prescriptive and more mediation is required. In IBB, the goal of
the facilitator is to encourage participants to exchange information and
offer their own ideas, and to make sure that the parties proceed through
the process as prescribed.

MNA staff specialists recall an early lesson in IBB information sharing.
Members of the HealthEast negotiating team specified what they thought
it would cost to give RNs a 3 percent increase in salary given the
hospitals financial profile. The MNA committee members were unconvinced
and asked for additional data to back up management\'s calculations. Not
until they scoured the figures with a fine tooth comb did they
acquiesce. Finding the analysis accurate and the committee members
trustworthy \-- and understanding the broader financial implications of
the RN wage component \-- was important to their ability to communicate
with each other. In essence the process compelled the parties to define
the issue with comprehensive and uniform detail. Furthermore, the MNA
stresses the difference it made to have a timely, relevant exchange of
information. The speed and veracity of information trades helped to
build trust and supported nurse representatives in their implementation
of IBB.

**Dialogue**

However, IBB does not lend itself to quick solutions. IBB encourages
dialogue and as a result, the complexities of every issue surface during
contract negotiations. Likewise, there is an attempt to come to
consensus on a far greater number of issues. According to FMCS, there
were some misgivings when participants began to realize that learning
and using the process was a major undertaking. If not an increase in
actual time, there is a monumental increase in the amount of data, the
number and depth of the issues that emerge, and the number of people who
are involved. An administrator at HealthEast notes that IBB processes
were first introduced to the hospitals when they were bargaining as a
multi-employer group. In this highly charged setting with 34 people at
the table engaged in coordinating bargaining, and where the employees
rather than the employees\' lawyers are beginning to communicate openly,
the facilitator must maintain neutrality while keeping the parties
focused on their agenda. An awareness of the scope of the project is
crucial if participants are to manage early frustration.

**Joint Communiqués**

Joint communiqués are another element of the new labor-management
relationship. An additional mechanism for shared information, the
communiqués (newsletters) describe the progress of negotiations for all
employees while the bargaining committees are in session. A group of
individuals from the negotiating committee works together to draft the
language and the final document is released with a stamp of approval
from representatives of both labor and management. These documents not
only assist in the implementation of IBB, and the dissemination of the
joint relationship to the wider employee group, but also help both
parties to clarify what is meant by contract language developed during
the frenetic bargaining episodes, thereby limiting the potential for
future miscommunication.

Joint communiqués represented such a departure from the adversarial,
positional tone of previous negotiation \"updates\" that the union in
particular was challenged to justify the cooperative effort. MNA nurses
were accustomed to knowing what the union would ask for before the
negotiations began, and even more reliant on the unions stalwart
position on wages and benefits. It was difficult to advise the
membership that managements offer was a good deal when it was simply
based on what management\'s bargaining committee members told them they
could afford. According to hospital administrators, MNA leadership was
instrumental in encouraging consensus at this stage of the process. They
informed the membership that the information was trustworthy, because it
was based on data that management and the union had developed together.
This points out the importance of a procedure for two-way communication,
and the support of that procedure by individuals who champion the
process to others who have not been directly involved.

**Nurse Representatives Buy In**

The hospitals and the MNA pronounced the 1995 negotiations a success.
While the contract itself was not significantly different from earlier
agreements, the people involved in the negotiations were. The real
supporters of IBB were the MNA elected chairs and representatives who
were most involved in its application. MNA representatives were so
impressed by the IBB experiment that they returned to their membership
singing its praises. During the ratification drive, they worked to
educate the membership about IBB and its perceived benefits.
Furthermore, they told the nurses that they would never go back to
traditional bargaining. To illustrate their support of the process, they
had written in contract language that mandated the use of IBB
problem-solving techniques within the System Labor-Management Committee
\[shared hospital group\] as well as other individual hospital policy
committees. The contract also specified that there should be equal
representation from management and the MNA on each committee. As one RN
representative said, \"to come 180 degrees from my earlier rabble
rousing days, and pre-negotiation skepticism to this wholehearted
support for cooperation with management really meant something because
it was coming from me.\" According to the MNA, the nurses liked IBB
better than traditional bargaining because the process required their
participation.

**Joint Labor-Management Committees/Training**

The next step in the development of the joint labor-management
relationship was the utilization of IBB problem solving techniques in
hospital-wide policy making committees. In this case, the FMCS
commissioner acted primarily as a trainer.

As of the 1995 MNA contract, all of the following committees were
expected to adopt IBB-based problem solving techniques:

-   System Labor Management

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-   Staffing Advisory Committee

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-   Care Delivery Committee

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-   Health and Safety

While these joint labor-management committees had been in place for
several years already, the sentiment was that they were not effective at
nourishing real cooperation and joint practice. The hope was that the
techniques of IBB would engender a better day-to-day working
relationship.

**Building Consensus**

Action Plans that accompanied the 1995 contract specified the use of IBB
within the Staffing and Advisory Committee as well as the Health and
Safety and Care Delivery Committees. Still, much work needed to be done
before the committees could take advantage of the problem solving
techniques that proved so successful during collective bargaining
sessions. Though key employees were personally committed, organizational
and educational challenges remained. At the implementation stage, the
parties had to be encouraged to persevere. In a demonstration of their
commitment to labor-management cooperation, the hospitals equipped the
MNA co-chairs with voicemail and offices to carry out their
responsibilities. In 1995 both Childrens and HealthEast also agreed to
pay for the time that nurses spent participating on Labor-Management
committees. This agreement marks a departure from earlier practices, in
which union activity was voluntary or paid by the MNA. HealthEast
officials estimate they spend approximately \$30,000 a year on joint
labor-management practices.

FMCS provided the training for representatives on joint labor-management
committees to support their use of IBB techniques in the committee
meetings and on the hospital floor. Early training sessions at
HealthEast focused on nurse managers throughout all of the sites in
order to inform supervisors about the changes that MNA representatives
hoped to accomplish through the use of IBB. In keeping with problem
solving techniques developed during the contract negotiations, the goals
included more participation in decision-making at the unit level, and a
more open dialogue during committee meetings.

**Organizational Structure**

The MNA chairs are the chief spokespersons for the committees whose
members are elected from each nursing unit. Additional sub-committees
form to manage discrete issues that may arise during the monthly meeting
of one of the main groups. Participation on the committees is voluntary
and MNA representatives are paid by the hospitals for 12 hours a month,
which includes time spent serving on the committees which \-- at between
1.5 to 8 hours a month per committee. At HealthEast the chairs convene
three of the committees on the same day in order to expedite the
process. The chairs make decisions on what information should be
disseminated to the staff nurses, although minutes of all meetings are
kept in a notebook in a common area. There are regular newsletters,
bulletins, and voice mail communications with the staff. In addition to
their local responsibilities, chairs meet every six weeks in a
Metro-Wide Committee to keep informed of labor issues at other area
hospitals.

Communication between committees is facilitated by meeting minutes. Each
committee also reports back to the System Labor-Management Committee on
all issues on which they reach consensus. The hospitals report that when
consensus is not reached, committee members still try to avoid
politically divisive voting at all costs as it is seen as
anti-collaborative. The FMCS commissioner suggests several reasons why
the parties might not reach consensus: key decision makers might be
missing from the table, emotions may become too elevated, the issue may
belong in contract bargaining because it conflicts with contract
language, or it may belong in a different policy committee. According to
FMCS, when problems arise, the most likely explanation is that the
parties have failed to identify the problem well enough. This
underscores the key point that joint problem solving processes are both
time consuming and complex, and the third party facilitator must
continue to provide energy and enthusiasm during this stage of
development.

**Formal mechanisms for collaboration**

During contract negotiations, and within labor-management committees,
information flows between management and labor in a variety of ways. In
some cases the contract may specify that particular information will be
shared with committee members. An Action Plan in the 1998 Childrens
contract states that the hospital system will share its data and
assessment of patient volume and projections, reimbursement changes,
payor/contract changes, and other environmental factors. Management may
communicate informally with staff specialists at the MNA. Committees or
sub-committees may request information regarding any aspect of hospital
policy or performance from management. Hospital administrators also have
several management-only groups that meet on a bi-monthly basis. These
groups share hospital-wide policy changes with all employees, union and
non-union.

By contract, joint labor-management committees have some ability to
enforce solutions that are a product of the committee process. For
example, Care Delivery has the authority and accountability to specify
the role implementation of the RN in the patient care delivery system of
the organization and the application of the nursing process in that
delivery of patient care. However, labor is not determinative in
management\'s business decisions. During the 1998 contract negotiations,
the MNA asked for a seat on the board at HealthEast and was denied.
Human Resources personnel explained that this vote would have unfairly
privileged nurses over X-ray technicians, LPNs, and all other hospital
employees.

**Institutionalization of Joint Practices**

In the hospitals\' committee structure, the relationship between staff
nurses and their elected representatives, the extent of voluntary nurse
participation in the committees, and the FMCS training are the critical
factors in the implementation and nurse group acceptance of IBB. MNA
representatives were ultimately responsible for bringing staff nurses
into the new labor-management relationship. As a result of the
inclusionary style of IBB bargaining committees in 1995 and 1998,
elected chairs and representatives experienced greater involvement in
the construction of labor-management processes. Empowered by this
achievement, MNA representatives led a concerted effort to improve
communication with middle managers \-- or nurse supervisors \-- on
behalf of their membership. The institutionalization and acceptance of
joint labor-management practices begins with members of the bargaining
committee, and filters through to staff nurses during MNA all-nurse
meetings and in daily interactions on each hospital floor. For this
reason, the nurse representatives must be well trained, confident, and
possess sufficient resources if the joint labor-management relationship
is to extend beyond their immediate experience.

**Training the Nurses**

Because the parties interests will be determined by who is at the table
and the degree to which they know the procedure, representatives must be
fully aware of the interestsof their membership and well-versed in the
IBB procedure. IBB problem solving is unlike traditional bargaining
because it requires the ability to articulate the multiple interests
behind a given demand or position. Additionally, management and labor
must work together to identify several satisfying solutions.

The nurse representatives emphasize the importance of training. When the
hospitals first began using IBB problem solving techniques during
labor-management committee meetings, many RNs felt that even their
bargaining unit nurses had insufficient experience and education about
the process. Some RNs argue that IBB itself is not truly collaborative
without this complementary investment in training. To illustrate their
point, nurses from Children\'s took a policy that had come through IBB
deliberations in the Staffing and Advisory Committee, and repeated the
IBB process on the same issue with their Shared Governance group (staff
nurses and nurse managers on each unit or floor). When using different
participants, they found that the end result was less skewed towards
managements objectives.

Part of the challenge for FMCS trainers is to develop an exit strategy.
The commissioners must help the participants develop the capacity to
carry out the joint-processes independently, both in order to conserve
their own time and to help institutionalize the practice. Childrens MNA
chairs and representatives now create their own IBB information sheets
for their members. As new representatives take the place of old, FMCS
facilitators will often provide a refresher training on IBB or help
participants work through problems in a specific committee.

According to FMCS, part of the reason that the hospital groups bought
into the IBB method during the early all-hospital orientation sessions
was their desire to use the process on a daily basis to resolve
grievances during the term of the contract. To the extent that problems
arise and are handled with some version of the process, IBB extends
throughout the hospital system. The MNA estimates that approximately ten
percent of the staff nurses regularly participate in this aspect of the
joint relationship. After four years during which IBB processes have
moved from the bargaining table to individual hospital units, the
application of IBB to daily concerns is more common.

###### **Woodwinds Health Campus**

The FMCS commissioner who provided training, facilitation, and mediation
for the multi-employer hospital group contract negotiations and
labor-management committee trainings in 1995 and 1998 did not want the
hospitals to rely on other cooperative labor-management models such as
Saturn and Harley Davidson when they created their joint labor
practices. Recognizing the failure of earlier efforts to implement
substantial change in the hospitals, she encouraged the parties to
develop a personalized IBB program so that they would have more
ownership of the process. No document describes the way that IBB is
going to operate in negotiations between the hospitals and the MNA,
although the parties' work from FMCS developed IBB training manuals. In
adapting IBB for their continued use, she suggested instead that the
service industry, and the health care sector in particular, required a
new construction. Her advice, coupled with their experience, led
Woodwinds administrators to develop a unique and collaborative
relationship with the MNA nurses.

Built on a hill overlooking several acres of protected wetlands the
Woodwinds Health Campus was designed to be a non-traditional health care
provider. Every aspect of the new hospital is designed to embody a set
of principles that emphasize a patient-centered holistic approach to
health care. Turning into the concrete Campus Parking lot from MN
highway I-494 is unremarkable. A long driveway leads to new buildings
that from the outside resemble any other modern health care facility.
However, entry into the main building suggests that something different
is happening inside \-- this does not smell like a hospital. A walk
through the hallways reveals abundant natural light from enormous
picture windows and carefully placed, muted table lamps. The curved
walls are painted in soothing shades of beige and pale green that mirror
the pine trees that can be seen from the spacious waiting area. One wall
boasts a floor-to ceiling brick fireplace. Comfortable couches and
wooden tables are placed strategically throughout the room. Visitors are
made to feel as if they are spending a relaxing afternoon at a ski
lodge.

To remain consistent with the goal of providing an innovative
environment for health care, administrators feel that all of their
employees must be absolutely committed to the same unique mission. As
the MNA and hospital executives set out to craft a new labor
relationship for the Woodwinds Health Campus, the parties were able to
build on the experiences and strategies they had learned during several
years at the parent hospitals.

**Origins of Woodwinds**

In 1996 HealthEast began talking with administrators from Allina
Healthsystem and Childrens Hospitals and Clinics about opening a new
hospital in the suburb of Woodbury. Woodbury is the fastest growing
suburb of Minnesota, located 20 miles East of the Twin Cities. The
population is primarily made up of families who are locating there for
the schools, jobs, and housing opportunities. In Minnesota, state
legislation caps the total number of hospital beds that can be made
available. Administrators felt this was an ideal location to locate
using hospital bed capacity that had been made available by the closing
of several of their downtown hospitals and given the expanding client
base. Allina Hospital was also looking for new business opportunities in
the region and the two hospitals decided to form a partnership. The
Board of Directors and administrators at HealthEast decided that St.
Josephs hospital would also be closed to accommodate the additional
beds at Woodwinds.

During the summer of 1996 management at HealthEast spent weeks preparing
carefully planned media releases to announce the closure of St. Joes to
hospital employees and residents of surrounding communities. However,
news about the closing leaked just days before the announcement and
1,700 HealthEast employees responded angrily, led by MNA chairs
representing 450 nurses, who felt deceived by hospital administrators.
Though the IBB process was still in its infancy for the nurses union,
they had been working consistently since 1995 to improve relations with
management through IBB problem solving, enhanced communication, and
mutual trust. According to a HealthEast administrator, employees were
passionately vocal about the community need for St. Joseph\'s. After an
administrator called an all-hospital emergency meeting to discuss the
situation, heated meetings between the employees of St. Joes and
management continued. There was an atmosphere of heightened anxiety
about Woodwinds as all of the employees grappled with the expectations
surrounding yet another hospital closure.

Meanwhile, the planned collaboration between HealthEast and Allina
deteriorated due to different beliefs about shared corporate
responsibility and the increasing possibility that St. Joess would
remain open. Concurrently, in discussions about the relationship between
an adult care hospital and an all-pediatric facility, administrators
from HealthEast and Childrens began to envision a new type of health
care system. The location and population of Woodbury also seemed to
recommend a different approach to services. When in 1998 HealthEast
decided not to close St. Joes, it provided the opportunity to imagine
an entirely new labor relationship. The members of the Woodwinds
management team recall their first attempt to create a philosophy of
labor relations built without pre-existing notions of traditional
employee roles\-- \"we found ourselves sitting in a room looking at each
other, and asking ourselves, now what do we do?\" For the first time,
the hospitals were able to think broadly about what they would want a
model health care system to look like.

####### Letter of Understanding

The 1998 MNA contract negotiations were in process when the legal
documents for Woodwinds were signed by HealthEast and Children\'s
hospitals. A dialogue about job security thus became a part of the
negotiations as nurses requested to know about employment opportunities
at Woodwinds and the anticipated relationship between the parent
hospitals and the new facility. Improved labor relations had clearly
changed the parameters of the discussion. As a sign of their commitment
to include nurses in the discussion about Woodwinds, management and the
MNA at the Childrens and HealthEast tables signed a *Letter of
Understanding* stating that they would work together and that nurses
from the parent hospitals would be given preferential hiring. Although
nurses wanted a further guarantee that HealthEast would continue with
collaborative union relationships at Woodwinds, under National Relations
Labor Board law, the hospitals were unable to say that they would
recognize the MNA. The creation of the letter was both a momentous
occasion and a delicate matter, and administrators at HealthEast feel
that it was a key piece of what settled the MNA contract that year.

####### Woodwinds Labor-Management Committee

Although management intends to extend the cooperative working
relationship to all employees, including the seven labor groups that
will be at Woodwinds, the MNA was the only union with which they engaged
in dialogue prior to the opening of the facility. According to hospital
administrators there were two reasons why management reached out to the
nurses union. First, nurses expressed an interest in the innovative
health care concepts that Woodwinds administrators were developing.
Second, other labor groups were not universally represented across the
system at all of the individual hospitals. Finally, they also note that
the MNA is the largest group, with over 1,000 members at HealthEast and
has become by far the most collaborative. To carry out the intent of the
*Letter of Agreement*, the hospitals formed an MNA steering committee
with labor and management representatives from HealthEast and
Children's. This group, informally called the Woodwinds Joint
Labor-Management Committee, included two nurses from each hospital, two
MNA staff specialists, Human Resources personnel, Administration and
Operations executives, and a Clinical Nurse Director. The trusted FMCS
mediator who had introduced IBB to the hospitals was again asked to
participate by facilitating committee meetings and mediating the
agreement. She also provided invaluable assistance by setting the ground
rules for the dialogue.

The committee met for one day a month for a full year starting in August
of 1998. At first, the 12 members of the committee did not discuss the
details of Woodwinds. Rather they clarified the issues about which they
could and could not negotiate. At this stage of the process, the
facilitator can be helpful in getting all sides to a position of equal
standing. In particular, the dialogue focused on the procedures for
nurses who wished to transfer to Woodwinds and the possibility that the
hospital could open as non-union. As veterans of two contracts using IBB
and several years of IBB problem solving in joint labor-management
committees, union and management members of the steering committee were
able to talk together informally about issues without the heightened
sense of controversy and inevitability around traditional bargaining. As
they tried to understand the reasons behind the priority that each side
gave to an issue, they were able to test the water and talk about ideal
scenarios for labor-management relations and care delivery. The parties
were also able to recognize their shared self-interest. As
administrators pointed out, if the hospitals establish something the
MNA cant live with, it will work to our disadvantage, and reverberate
back to the parent organizations.

**Management Concerns**

The ability to focus on those practices that management felt could be
enhanced with a new labor-management philosophy was easier to define
because of the work with IBB over the previous three years. The
examination of old work rules during the 1995 contract negotiations
created a foundation for this effort. Although those rules had remained
largely intact after the negotiations, it represented the first attempt
to revisit some parts of the contract that had been erected over many
years. For example, management felt that the call-pay practices were
archaic and incomprehensible, with different pay practices at each
hospital site. As they began to formulate policy for Woodwinds, previous
negotiations provided management some familiarity with the problems, as
identified by past bargaining committee members, and possible solutions.
The new hospital was considered an opportunity to shake off some of the
old stuff about double-time for overtime and to return to a more
equitable and common sense notion about when extra compensation should
be made for particular work and when it was simply a part of the job. As
an alternative to past pay practices, management has considered making
employees salaried and offering self-scheduled time in which hours could
be scheduled around other commitments. Although nurses on the Woodwinds
committee were included in this discussion about scheduling, management
is clear that it made the decisions about how they would hire and
compensate employees. As the hospital was non-union for the duration of
the meetings, the hospital could not legally negotiate to establish
conditions of work.

Management would like to have a hospital campus where the treatment of
employee groups is uniform, union or non-union. To accomplish this, the
Wellness Initiative, part of the Woodwinds Compensation and Benefits
proposal, was informed both by an employee group representative across
employee categories and by hospital-wide surveys to identify the most
popular health initiatives. Woodwinds administrators are promoting an
employee-friendly environment that emphasizes flexibility, convenience,
and the recognition that there is life outside of work. The hospital
will offer a core level of traditional benefits paid for by the
employer, as well as an optional benefits package for which management
and the employee share responsibility. Included in the optional package
are non-traditional services such as dry-cleaning, prepared meals-to-go,
on-site access to fitness equipment, career counseling, and on-site
childcare services. \"It is critical that we are in touch with our
employees from a Comp and Benefits perspective\" said one administrator
at HealthEast, \"because we are trying new ideas and we need to make
sure our employees are taking advantage of them, particularly given the
expense to a non-profit hospital.\"

**Labors Commitment**

Given the nursing shortage in the Twin Cities the Woodwinds
Labor-Management Committee had to consider the prospect that the parent
hospitals would lose RNs to the new facility if the benefits at
Woodwinds were more appealing. This concern had to be balanced with the
nurses' desire to receive preferential hiring and to participate in the
creation of an environment that would reward nurses with a competitive
compensation package. The possibility that the hospital would not be
organized by the MNA created another cause for concern. Nurses wanted to
have a safety net in place that would allow them to try Woodwinds and
then return to the parent hospital if the philosophy or labor
relationship did not suit their needs. Calling again on the expertise of
the FMCS mediator, the committee members created *Transition Agreements*
for HealthEast and Children\'s nurses.

####### Transition Agreements

The Transition Agreements outline the process for nurses that become
employees of Woodwinds. It begins with an acknowledgement that after a
quota of RNs are hired, the MNA will establish a process for a card
count, after which RNs will have 7 days to decide whether or not to stay
at Woodwinds. Nurses may then transfer back to their parent organization
within 90 days. The Transition Agreement states that nurses from
HealthEast are able to return to their exact position or to a similar
position on the unit, or to bid on any open position during this 90-day
period. They maintain their seniority and benefits at the parent
organization through casual status. However, nurses from Childrens have
the same options only if the facility becomes non-contract. The
distinction reflects the fact that Woodwinds will have only 9-10
pediatric nurse positions, but over 100 RN positions that will draw from
the nurse pool at HealthEast. If the nurses do choose to have the MNA
represent them, several Transitional Agreement items become operational:
a new Woodwinds contract is negotiated, and FMCS provides mediation for
any disputes that arise.

In addition to job security, nurses from Childrens hospital also
expressed concern regarding the quality of pediatric care at Woodwinds.
In order to provide a community-based model that offers a comprehensive
range of services to adults *and* children and still remain in their
budget, administrators plan to employ nurses and doctors who are
generalists rather than pediatric-specific, as is the case at
Childrens. Nurses were concerned about the health care product and the
skill of the nursing staff. They also felt that the child care offering
within this health care model threatened the world-class reputation of
the parent hospital and mis-represented the Woodwind\'s pediatric care
capacity to the Woodbury community. Though Childrens nurses on the
steering committee felt management understood their explanation about
the compromise in quality that occurs when pediatric care is combined
with adult medicine, management still insisted that there was not enough
of a difference to justify the increase in cost. After a protracted
dialogue, the committee was able to settle this issue by agreeing to
remove \"Hospitals\"from the name of the sponsoring hospital, leaving
it only as Childrens Clinics (rather than Children\'s Hospitals and
Clinics St. Paul). Before the introduction of IBB problem solving, this
committee might have been less able to reach a compromise.

**The Challenge of Process**

The Woodwinds Committee process was challenging in several ways and
required a facilitator who understood the dynamics of labor. In
combining two bargaining units and four hospital groups, the Committee
created unusual bedfellows. Some issues created natural alliances
between HealthEast administrators and HealthEast nurses in opposition to
Childrens administration and nursing employees. For example, all of the
inpatient business will be under HealthEasts jurisdiction, serviced by
beds that are considered replacements for those that closed at Divine
Redeemer hospital, once owned by HealthEast. This arrangement, when
considered in conjunction with the ownership structure \-- Childrens 20
percent ownership of outpatient services to HealthEasts 80 percent \--
caused some HealthEast employees to feel that more was at stake for
their hospital even though all committee members had an equal voice
regarding Woodwinds. At other meetings, more conventional labor versus
management configurations emerged. Interestingly, issues about the
quality of care, or the service delivery were often driven by nurse
committee members, rather than by management, as was the case regarding
the use of the Childrens Hospital name.

The Committee was breaking new ground in labor-management practices
simply by negotiating with MNA representatives before Woodwinds became a
contract facility and by including the MNA but not other unions. For
this reason, negotiations were complex and FMCS counsel was an integral
part of the process while participants struggled to collaborate without
violating national labor relations law. The process was also very
time-consuming, as each of the parties with an investment in the outcome
needed an opportunity to present their interests. The Transitional
Agreement for Children\'s that went through IBB in the Woodwinds
Labor-Management Committee was informed by surveys created by the MNA
chairs for the nurse membership, and was then re-examined by staff
nurses at Childrens as part of an iterative process. At the initial
planning stage, Care Delivery committees that included nurse
representatives from every unit met to discuss nursing care practices
for Woodwinds and then communicated this information back to the
representatives on the Woodwinds Committee. At times IBB was too
cumbersome for the stated goals and 3-hospital membership of this
steering committee. In those instances the FMCS facilitator helped the
participants to modify some of the steps. One administrator from
HealthEast feels that the Woodwinds process worked because \"early FMCS
training in IBB had taught \[us\] how to break out our work in
manageable pieces.\"

**Communication**

The development of trust and the ability to communicate are clearly the
most challenging and profound aspects of the joint labor-management
relationship. Each obstacle encountered during the implementation of IBB
serves either to reinforce or limit these two aspects of the
collaboration. Time is also a factor, not only during the acquisition of
new techniques, but because IBB processes encourage the expression and
elaboration of all possible interests. In general, both parties have had
a positive experience, successfully meeting and adapting to the
challenges of the joint relationship. Still, some aspects of the
joint-process remain difficult, for example, negotiations around
economic issues. Some IBB practices have been changed to allow for more
flexibility\-- RN representatives on the bargaining committees no longer
refrain from sharing information with the MNA membership about the
status of negotiations during the bargaining cycle as required by strict
IBB methods*.* Many of the joint processes are also iterative, requiring
on-going maintenance and attention, such as the committee system and the
implementation of Action Plans.

With respect to managements objectives in adopting IBB processes, both
labor and management feel better equipped to anticipate possible sources
of tension that could precipitate a breakdown of trust. The ability to
share information between management and union appears to be one of the
key components of this trust, mentioned by every interviewee as
essential to the successful implementation of this kind of problem
solving process. In many cases, the flow of information is just as
important as the information itself. The committee structure and
information gathering processes of IBB help management to seek out
specific input from the nurse group. According to both management and
the MNA, the ease with which information is willingly shared is one of
the most beneficial aspects of the IBB process and contributes to the
on-going collaboration.

**Business decisions**

Even though the traditional group of hospital administrators makes
administrative and financial decisions, MNA representatives do have a
voice in the types of issues that are discussed and the way they are
resolved. For example, the MNA chairs at Childrens were involved in the
interviewing process for several upper management positions that have
recently opened. As a result of the new labor-management relationships,
administrators from Human Resources are much more likely to call MNA
staff specialists to alert them to management concerns or hospital
rumors. The RN chairs also emphasize improvements in communication. If
nurses bring up issues about a hospital take-over to the
labor-management committee, for instance, they believe management will
share available details. Indeed an open dialogue is now expected; MNA
chairs would be surprised and angry if an issue surfaced and was
resolved without notification and input from labor. The nurses\'
reaction to close St. Joe\'s without employee input bears witness to the
institutionalization of collaborative processes. The union may not have
a formal vote in business decisions, but its voice weighs in before any
major decision is made.

**Institutionalization on the Hospital Floor**

MNA chairs believe that by increasing the number of issues that staff
nurses can talk about with their managers, the adoption of IBB processes
has had a tremendous impact on their ability to resolve problems before
they become grievances. An RN from HealthEast comments that staff nurses
came to respect the process because its supporters were able to
demonstrate that they could accomplish more and satisfy common goals by
working in an IBB system rather than by immediately filing a grievance.
An MNA co-chair estimates that half of all staff RNs have had an \"IBB\"
interaction with nurse managers. Equally important to the acceptance of
the joint relationship is the fact that nurses, who have worked together
side-by-side in an extremely stressful environment, trust their
co-chairs despite only a limited decline in the number of actual
grievances. The perception that solutions are arrived at cooperatively
is likely to produce a more comfortable, secure working environment,
even without the quantitative evidence.

**Productivity**

Both management and labor believe that there are too many variables
interacting with the Hospital\'s productivity level to isolate the use
of IBB as a change factor. As one RN stated, our nursing workload is
such that we could have increased our productivity by 100 percent and
you wouldnt know it. We are doing more with less.Employee
satisfaction surveys that HealthEast has been using for the last few
years demonstrate that RNs are happy in their workplace and feel valued,
characteristics that the nurses believe will lead to improved
productivity. One administrator suggested that profits improve in the
absence of a strike, and so the cooperative relationship helps to
prevent financial loss. According to HealthEast, their market share has
been decreasing not because of any decline in productivity, but because
nearby Regions Hospital has been re-defining itself as a community
hospital and has attracted some of HealthEasts patients in the process.

A 1998 Economic Policy Institute report, *Committing to Care:
Labor-Management Cooperation and Hospital Restructuring,* provides
support to the claim that union and management collaboration improves
productivity within the health care setting. In a multivariate analysis
of surveys from 14 Minneapolis/St. Paul hospitals over a 10-year period,
including HealthEast and the MNA, researchers identified three important
outcomes of labor-management cooperation, including higher RN staffing
ratios for patients, higher levels of employee involvement, and better
financial performance. The effect of unions on employee involvement
occurs through formal practices and is greater for occupational groups
with longer running labor-management committees. The analysis also found
that comprehensive cooperation across all union groups within a hospital
is correlated with nearly \$80 more income per patient day.

**Quality**

The Minnesota hospital employees believe that quality of care is
consistently high and that improvements in quality of outcomes are often
a result of advances in technology. Still, the hospitals and their
employees do strive to offer the best patient-care and patient surveys
reveal that they have been successful. While a shortage of labor
combined with changes in patient acuity levels may require nurses to
work harder than ever before, RNs do not feel that the quality of care
at their hospitals has been compromised. However, they believe that
using lower-skilled LPNs and nursing assistants to do the work of RNs
diminishes the quality of care. The nurses are adamant about maintaining
their role as the primary caregiver in the hospitals. Karen Patek, a
labor relations specialist at the MNA for over 30 years, comments that
even when a contract is bargained every three years, the parties have to
make it live and breathe and work on a daily basis. The better the
relationship with the employer, the easier this is to do. IBB seems to
have a gone a long way towards mitigating the war of grievances,
arbitration, and informational grief that comes with a protracted
labor-management battle, and in a sense, this leaves more time and
energy to focus on patient care.

######## **Lessons and Challenges**

There are a number of key lessons that the parties believe they learned
in the process of moving from traditional collective bargaining to
Interest Based Bargaining concepts. These have to do with the nature of
communications, the need for flexibility and adaptability, and training

**Communication and Flexibility**

Nurse representatives feel that while they may not get more in terms of
dollars and cents, IBB allows them to finally address many issues that
had always been compromised away in traditional bargaining. Over the
past several years MNA nurse representatives have become more practiced
at communicating their satisfaction with the process to the nurse group.
For the RN representatives at HealthEast, \"one of the key challenges of
IBB is being able to articulate those things that \[you\] see as
positive to the nurse group.\" In textbook, IBB the MNA leaders\' (both
staff specialists and nurse representatives) ability to communicate with
members was sometimes restricted. According to the FMCS mediator, the
groups sometimes blame the IBB process when they dont get what they
want, but are unwilling to abandon the process altogether. Instead, they
have modified the process to meet their needs, including a clause that
reserves the right to bargain more traditionally, a streamlined practice
of identifying interests, and an expanded opportunity to communicate
with membership. They have also adopted several practices that assist in
the communication and trust-building exercises that support IBB, while
also limiting the flexibility of processes that are not specified in the
contract. For example, when the 1998 contract was negotiated, the
committee put intent language around contract language to specify its
meaning. Nurses are now assembling an Intent manual that they hope will
serve to eliminate ambiguous areas of the contract.

**Adapting IBB to maintain the joint relationship**

The textbook IBB process that the parties used for their first
bargaining contract in 1995 has evolved into a more individualistic
style. Instead of creating an exhaustive list of all the options,
parties now focus on and discuss a few primary interests. Jeanne Frank,
the mediator from FMCS, notes that while both management and labor
participants do want to know what the underlying concerns and issues
are, it has been the trend with hospital groups that have used IBB over
the last six years to forgo some of the more time consuming exercises.
She also notes that while the parties appreciate the more collaborative
feel of IBB, they are still reluctant to give away any of the strategies
that they could use if the process broke down and they returned to
traditional bargaining.

**Training for Future**

A high level of skill and commitment is required to effectively engage
cooperative types of labor-management problem solving techniques. In
addition, a high turnover rate among key participants within
labor-management committees requires additional education and poses a
potential challenge to implementation. Where some administrators on the
negotiating committee have recently retired from Children\'s, MNA
representatives cannot be sure that the new management will continue in
the direction of their predecessors. In 1995, and again in 1998, nurses
argued that there are disadvantages to bargaining too many \"Action
Plans\" into the contract \-- a process that remands issues to the
Staffing and Advisory committee or other committees to address and
resolve at a later date. MNA representatives have felt increasingly
uneasy about leaving items for Action Plans that could be included in
the contract. Action Plan items that are not subsequently addressed or
resolved can lead to erosion of hard earned trust and threaten the
underlying relationship. Nurses at Childrens have attempted to manage
their insecurity by taking an active role in the resolution of
outstanding action plans.

######## **Conclusion** 

The ability to further the joint relationship challenged both parties to
eschew past history and stereotypes. Administrators had to let go of the
assumption that \"the union was out to get as much as possible out of
management,\" and for union representatives, that management would cheat
employees out of their benefits, if not maliciously then at least as
part of a bargaining strategy. Several steps helped to alter these
perceptions. First, early training in IBB processes, including switching
sides through a role-playing exercise, allowed participants to see the
others point of view. Beginning with non-inflammatory issues, even
during the role-play, helps to build early consensus that can carry into
more difficult topics. For example, HealthEast chose to start with a
dialogue about the hospitals cafeteria hours because only 10 percent of
the nurses were able to take advantage of the meal plan given their work
schedules. Talking about a non-threatening issue, instead of wages,
allowed the participants to explain the problem and test the process.
Over time, small agreements lead to less adversarial positions and
enhance the relationship.

A lack of commitment can unravel the joint management relationship. An
administrator from HealthEast describes the commitment in terms of
communication: in previous negotiations, management would just say
\'No\' and hope that it wasnt one of their biggies. The exchange of
information, through stories and examples, about why something is
important can take several days, but the outcome is qualitatively
better. On the other hand, some issues are not resolved and the parties
can agree to take them off the table and hope to work through them in
Action Plans. Management describes the old way as a poker game wherein
you just wouldnt hear about something for three weeks and you were
forced to read the signals and guess whether it was still important. In
IBB, when issues are off the table both parties are aware of it, which
reduces miscommunication and helps to build confidence in the process.
With the issues that remain, the parties are challenged to remain
open-minded and persevere, behaviors that are much easier to espouse if
there is an underlying sense of trust and commitment.

The organizational structure of the committee system at the hospitals
provided a forum for the practice and expansion of the joint
relationship. The prior existence of this structure has also posed some
challenges because IBB processes have required extensive training and a
greater exchange of information within and among committees. Some of the
problems encountered in implementation can be solved through additional
training and experience. Still, constant commitment and attention are
necessary if IBB is to become a more generalized problem-solving
technique.

There are continuing threats to the long-term survival of the joint
labor-management relationship. Economic issues continue to be the most
difficult to negotiate even given more collaborative processes. At
present, there is increasing competition among hospital systems due to a
labor shortage in the Twin Cities. In addition, the breakdown of the
multi-employer bargaining group suggests that some of the health care
systems will offer higher wages or expanded benefits packages to attract
nurses. In turn, local MNA units may feel obligated to demand higher
wages despite their understanding of their hospitals financial
position. The largest Twin Cities health care system recently increased
the salary of their radiation technicians by an additional \$2.00 to
\$4.00 an hour, forcing HealthEast to do a wage re-opener with the ADIT
union. Some hospitals are offering signing bonuses of up to \$20,000 for
pharmacists. Although HealthEast and Childrens have worked hard with
their employees, unions, and specifically with the MNA nurses to
establish a different kind of labor relationship, the labor practices at
other hospitals will clearly have an impact on their future successes.

**Epilogue**

In the summer of 2000, nurses and staff at the Minnesota Nurses
Association who had worked for over a year to develop innovative
cooperative labor-management agreements with hospital administrators at
the new Woodwinds Hospital failed to collect enough union cards to call
for a union representation election. After the hospital opened in August
of 2000, the Transition Agreement signed by all three parties
(Children's Hospitals and Clinics St. Paul, HealthEast Care Systems, and
Woodwinds Health Campus) on October 8, 1999 became effective and the MNA
had 90 days more to obtain more than 50 percent support for the nurses'
union. Again, the union failed and on November 5^th^, the new hospital
began to operate as a non-contract facility.

The MNA and the Hospitals are currently bargaining contracts at other
area hospitals including HealthEast Care Systems and Children's
Hospitals and Clinics St. Paul. Individuals from these organizations
have expressed an interest in speaking about the outcome at Woodwinds
after the 2002 negotiations are complete.

[^1]: Interest-Based Bargaining (IBB) is a form of bargaining in which
    both sides present their interests and attempt to find common
    ground. Building on earlier problem-solving models, IBB begins with
    the identification of an issue and an elaboration of the underlying
    interests regarding that issue. Parties are encouraged to work
    collaboratively, through joint information discovery processes, to
    find options that can satisfy those interests and that are mutually
    rewarding. The process requires an initial willingness to work
    together, joint training in the techniques, a facilitator trained in
    IBB, and the creation of a joint problem resolution team to carry
    out daily contract administration beyond negotiations.

[^2]: ^?^ With the exception of the 1995 contracts in which Childrens
    St. Paul and Childrens Minneapolis bargained together for the first
    time and separately from the multi-employer group, Childrens
    Minneapolis was always part of the multi-employer group. Childrens
    St. Paul and United Hospital, now part of Allina Healthsystem,
    bargained together and separately from the multi-employer group
    prior to 1992. For the first time in 1998 the hospitals used
    separate single bargaining units.

[^3]: .