A million-dollar denial

Lawsuit settlement shows
hospital in its true colors

By David Baker
Posted Sunday, March 15, 2009

The news last week that Northeast Health, which operates Samaritan Hospital in Troy and Albany Memorial Hospital, has settled a lawsuit in which it was accused of conspiring with other Capital Region hospitals to keep all their nurses’ pay low is consistent with other actions that have been noted on this page. And even though Northeast Health continues to loudly deny the allegations, it has also agreed to pay $1.25 million to remove the company from the class-action claim. To most people, $1.25 million is an admission, no matter what the PR department says.

The lawsuit, filed in 2006 against hospitals in several U.S. cities, also names St. Peter’s Hospital, Albany Medical Center Hospital St. Mary’s Hospital in Troy, Ellis Hospital in Schenectady and St. Mary’s Hospital in Amsterdam. The lawsuit alleges that the defendants conspired to keep their nurses’ pay scales at almost the same levels, thus removing competition. According to the suit, the hourly rates at each hospital varied by less than a dollar, costing the nurses an average of $6,000 a year.

The settlement requires Northeast Health to provide documents and allow depositions of its staff that can be used in the lawsuit that continues against the remaining Capital Region defendants. It has also agreed not to share information about current or future nurses’ earnings with the other hospitals.

The settlement comes a week after the announcement that by the end of the year St. Mary’s in Troy, St. Peter’s Hospital and Northeast Health will effectively merge into one entity under a single governing board.

This would seem to once again remove much of the competition each of them would otherwise face in hiring and retaining nurses.

The allegations in this lawsuit shouldn’t be a surprise to readers of this page. In an earlier posting it was pointed out that the apparent competition between the area’s hospitals was really a deliberate illusion. The post noted that although each of the hospitals advertises separately, an examination of their broadcast and print announcements revealed that each one would generally promote a different specialty, and that they would take turns in running their major advertising campaigns, thus keeping all their names in public view while at the same time maintaining a steady stream of revenue to a media that for the past 10 years has ignored virtually every malpractice lawsuit filed against those hospitals.

And now details of all those lawsuits are going to be available to everyone online. As Northeast has now tacitly acknowledged and will soon learn again, fighting claims when you clearly are wrong really isn’t good for your health.

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