Unions, Management Cooperate to Save NJ Hospital

John Commins, for HealthLeaders Media , February 8, 2010

Treacy says giving every employee an equal share in the gain sharing solidified a sense of commitment from all the stakeholders, even if no money is ever paid out. "It sounds kind of hokey, but there is a very nice sense that we are all on the same team and if we do well together we will all share the reward. And if we don't, we won't," she says. "The fact that the CEO's share of any economic windfall is identical to the housekeeper or the nurse—that there is no distinction based on title or department—we found that to be very attractive."

Challenges still remain and the future of the 292-bed nonprofit acute care hospital–the only remaining hospital in urban, working-class Passaic—remains cloudy. The track record for other financially troubled hospitals in the Garden State is not encouraging. St. Mary's is the first hospital to emerge from Chapter 11 bankruptcy in New Jersey. Since 2007, six New Jersey hospitals have filed for bankruptcy, five of which have either closed or sold their assets in bankruptcy.

Treacy concedes that unions and management likely would not have been so flexible in better times, if the hospital wasn't teetering on insolvency, leaving the city without a hospital, and employees without a job in a rough economy. "Out of desperation comes innovation, and I think everybody was desperate here—the community, the hospital, and the employees, and therefore the unions," she says. "Being desperate, we decided we would try to pull out together.

Even with considerable hurdles ahead, Sniffen is optimistic about the future of St. Mary's. "I'm very confident because there is an understanding to continue to be solid we have work together," he says.

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John Commins is a senior editor with HealthLeaders Media.

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