Arbitrated nursing wage increases – a double edged sword?

In Editorial, Opinion by Edmund Kwok4 Comments

At the beginning of the month, an arbitration decision finally came out after a locked negotiation battle between Ontario’s nurses’ union and the Ontario Hospital Association: despite initial threat of a decrease in wages, nursing wage increases will be 1.4% annually over the next 2 years. And rightly so – no one can argue against appropriate compensation for one of the most essential elements of acute hospital care. In fact, some would say this isn’t nearly enough. However, I fear we might see potential unintended consequences. Have we considered the overall cost equation?

The impact of nursing wage increases

Revenue

Budget: For the third year in a row, the Ontario government has frozen hospital budgets at zero percent increase. So the overall pot of money available to deliver hospital care, including paying for employees, is fixed. So that’s it for this side of the equation…not a good start.

Spending

Employees: Other unions for other healthcare professions have negotiated for 0.7% annual increases. So this component of spending will rise, with the nursing group viewed as getting the most increase out of the pack.

Patient Volume: Demand for hospital care is continually rising with no end in sight. Population aging, people living longer with chronic illnesses, greater utilisation of medications and diagnostics, and many other factors will continue to ensure an increase in this component of the cost equation.

Inflation: This will affect all aspects of hospital spending, rising year after year.

Infrastructure: Let’s be positive and say this will stay constant, as long as equipment don’t break down, we don’t invest in new and better technologies, etc…

Conclusion

As a result of the arbitration decision alone, hospitals in Ontario must somehow find a way to cover over $60-million dollars extra a year over the next two years, out of a fixed budget. This does not even take into account the other factors listed above. Hmm. If you were responsible for running a hospital, what options would you have? You can’t really stop patients from coming through your doors. You also have to replace broken/unsafe equipment, purchase medications and supplies, and so on.

I suppose you could close more beds, restrict diagnostic tests, withhold therapies and treatments – but that would directly lead to increased wait times, delays in patient care, and immediate direct negative effect on patient quality and safety. The other more likely scenario is to be more “efficient” and cut down on the single largest cost of running a hospital: employees.

So indirectly, a favorable arbitrated wage increase in the setting of harsh fiscal restraints set by the government, may in fact increase the chances of subsequent position cuts. This paradox is the unfortunate result of a broken system where decisions are made about individual components of the cost equation, without accounting appropriately for overall system sustainability.

I sincerely hope hospitals will be able to step up to such a Herculean task, and find ways to cover the deficit without cutting positions, closing beds, or reducing quality patient care. The trouble is, they have already been trying their darnest to “find more efficiencies” for the past years…how much more can be found? My sinking feeling is that the patient, once again, will ultimately be most affected by this latest development.

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Edmund Kwok

Edmund Kwok

Emergency Medicine. Quality Improvement. Patient Safety. Change Management. Healthcare Administration.
Edmund Kwok
- 2 days ago
Frontdoor 2 Healthcare

Frontdoor 2 Healthcare

Frontdoor2Healthcare, founded by Dr. Edmund Kwok in 2012, provides editorial and commentary on issues affecting Canadian healthcare from the emergency department’s “front door” perspective. Frontdoor posts allow for open sharing of the diverse opinions and perspectives of emergency physicians from across the country.
Frontdoor 2 Healthcare

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