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Appalachian Regional Healthcare President and CEO Jerry Haynes has notified the health care system’s employees that the United Steelworkers has issued an “intent to strike notice” to the not for profit corporation providing health care to 350,000 residents across rural eastern Kentucky and southern West Virginia.

Haynes, in the letter dated March 21, told employees that the USW broke off negotiations after issuing the strike notice and won’t return to the bargaining table for additional negotiations until Monday.

The USW represents licensed practical nurses, certified nurse aids, clerical, maintenance and housekeeping staff. Doctors and registered nurses are not part of the USW.

The 10-day strike notice coincides with the expiration of the current contract on Sunday, March 31.

According to reports, the breakdown in negotiations stems from issues concerning temporary disability, health insurance and wages.

Efforts to contact local USW president Roger McGinnis for comment were unsuccessful Thursday evening.

“The negotiations began in late January, and even though progress has been very slow, we believe that progress has been made during the overall process,” said Haynes.

Currently, based on the USW’s intent to strike notice, ARH has no alternative but to proceed with plans to ensure the adequate provision of care for patients in the event a strike occurs, he said.

“We are very concerned the strike notice will create uncertainty and anxiety within our communities at a time when our communities are already stressed due to the difficult economic times,” said Haynes.

This strike notice “triggers a number of significant and costly obligations” for ARH, including but not limited to:

• Providing notice to various state agencies, bond holders, financial institutions and others regarding the potential disruption of normal operations at each of our facilities;
• Making costly contingency arrangements to provide for the care of our patients and the operation of our facilities.

“In our final contract proposal to the USW, which is now posted on the ARH Intranet and www.arh.org sites, we are proposing fair, competitive and sustainable wages and benefits that will continue to make our ARH employees some of the best compensated workers in our region. While there have been some changes to the offered benefits, these changes are necessary in order to keep ARH viable and sustainable in a time when companies in our service area have been forced to lay off workers or close their doors. A summary document is also posted on the ARH intranet and www.arh.org sites, which will summarize ARH’s final proposal and the principle differences in articles that have not been agreed to by the USW and ARH.”

ARH itself faces many financial uncertainties brought on by federal and state government cuts to reimbursement rates and increases in federal regulations. A summary of the reimbursement reductions impacting ARH now and in the future, is also posted on the ARH Intranet and www.arh.org sites.

“I want to assure you and our communities that ARH fully intends to keep all of our facilities operational and, to the extent possible, maintain the medical services we now provide. I am hopeful an agreement can be reached so we can avoid any unnecessary disruption to our operations,” said Haynes.

Since negotiations began, a number of proposals have been proposed by both the USW and ARH.

ARH, clearly in a move to keep employees and community residents abreast of the strike notice developments, is urging employees to “review and understand ARH’s final proposal.”

“Since we do not have a complete proposal document from the USW, we are unable to post their complete proposal document, but would be glad to post it if the USW provides it to us,” reads a post on the ARH website.

According to information provided, ARH seeks to modify compensation and benefits packages, with the majority of these consistent with non-union employees and employees represented by the union representing nurses.

“ARH is forced into requesting these changes due to federal and state government reductions in reimbursement and increasing federal regulations. The reimbursement reductions and regulation increases have and will continue to create a financial burden on our health system.”

The major issues unresolved center on the following areas:

• Temporary Disability – The USW proposal does not call for a sharing of the cost of a voluntary plan by employees represented by the USW, or a reduction in the current benefit tables.
• Health Insurance – The current USW proposal does not call for medical benefit payments consistent with non-union employees and employees represented by the Southern United Nursing (SUN).
• Wages – The USW current proposal calls for approximately $12.2 million in increases in wages and shift differential over the next three years. These increases represent approximately 17.5 percent increases in total wages for employees represented by the USW. ARH proposes an annual bonus of $500 paid in two installments.

ARH says it has has made a “significant effort” to minimize the impact of changes to current employees, adding it is not requesting wage reductions for current employees, changes in overtime structure, reductions in stand-by pay, reductions in the shift differential pay, reductions in report-in pay changes in pension benefits for current employees, reductions in vacation time for current employees nor changes in bereavement leave.

The ARH proposal includes an annual bonus of $500 split in two payments.

According to information provided, the USW and ARH have agreed to adjust the sick leave plan, with all sick-leave that current employees have earned being banked. Thereafter, employees will begin to earn a new bank of sick leave to be capped at 160 hours. “In general, it will take an employee two and a half years to reach this new cap,” according to the ARH statement.

“Health insurance premiums around the country continue to increase from year to year. ARH has made significant efforts to minimize these increases for our employees. However, inflation in health care, requirements under the Patient Protection and Affordable Care Act, and other factors have caused our self-insured health care plan costs to increase. As a result, ARH is proposing changes in our self-insured health care plan. The plan ARH is proposing is the same plan as non-union employees and basically the same plan as employees represented by the SUN. ARH’s recent Benefits at a Glance document for non-union employees can be view at www.arh.org.

“Please review these changes and compare it to plans offered by other companies. Even with these changes you will find that the ARH plan is more generous and more comprehensive than what you would find in the market. We are making these changes so that we may continue to offer generous medical benefit plans to our employees in the future.”

ARH has 10 hospitals, multi-specialty physician practices, home health agencies, HomeCare Stores and retail pharmacies through the region.

It is the largest provider of care and single largest employer in southeastern Kentucky and the third largest private employer in southern West Virginia.

The ARH system employs nearly 5,000 employees and has a network of more than 600 active and courtesy medical staff members representing various specialties.

ARH faced a strike by the USW in the spring of 2007, followed by a strike of the nurses union in the fall of the same year.

To monitor updates on the negotiations on the ARH website, visit http://www.arh.org/Contract_Negotiations.aspx.