From the archives

Lawsuit settlement 
exposed unhealthy deal

Earlier this month, a merger between the operators of four of the area’s hospitals was completed.   Samaritan Hospital and St. Mary’s Hospital, both in Troy, Albany Memorial Hospital and St. Peter’s Hospital in Albany are now under a single governing board.

But before the merger, there was an alleged conspiracy, a backroom deal to cheat nurses that under the term of a settlement cost the hospitals million of dollars – money that could have been spent on patient safety.  Here’s how it was reported on this page in 2011.

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OPINION
                             
                         Working against the public
                         interest seems to be normal
                         at Capital District hospitals


By David Baker
First  posted Sunday, Aug. 21, 2011

Nine million dollars.  That’s how much the operators of five hospitals in the Capital District will pay under the terms of a settlement reached earlier this year of a class-action lawsuit in which they were accused of conspiring to keep nurses’ pay low.

According to the suit, the hospitals operated an ‘information exchange’, where they would regularly telephone each other with news about pay rates.  As a result, the hourly pay at each hospital for the same training and qualifications varied by less than a dollar.

The hospitals and the amounts they agreed to pay are:  Northeast Health, $1.25 million;  St. Mary’s Hospital in Troy, $744,000;  St. Peter’s Hospital, $2.7 million;  and Albany Medical Center Hospital, $4.5 million.

Northeast Health – which operates Memorial Hospital in Albany and Samaritan Hospital in Troy – was the first to settle.  All four loudly claimed that they have done nothing wrong – even as they agreed to pay millions of dollars to an estimated 4,000 nurses who were employed at the hospitals between 2002 and 2010.

A statement from Northeast Health in 2009 was particularly shrill:  “Those allegations were completely false and offensive,” it said.  “We never conspired with any other hospital to suppress nurse wages, nor did we violate antitrust laws in any manner.”

This as Northeast Health agreed to provide documents and depositions in the case that continued against other hospitals, and to pay more than a million dollars to nurses it claimed it hadn’t cheated.

But a survey released this week showed that nurses in the Capital Region  had pay rates below the national average. The data, from the U.S. Department of Labor was for May 2010, just after the Capital District hospitals had agreed to settle.

And it was about this time that all the hospitals except Albany Medical Center were arranging a merger that will bring them all under a single governing board, allowing them to continue to control nurses’ pay rates.  But no one, not the state – and certainly not the Albany Times Union – has expressed any concern about that.

The settlement of the nurses’ lawsuit is very visible evidence that there has never being any genuine competition between the area’s hospitals.  They just tried to make it look as if there was.  Several years back, a posting on this page noted that an examination of their advertising campaigns showed that they appeared to be carefully coordinated so that the hospitals took turns, three or four months at a time, in running heavy advertising messages, thus keeping their own costs down while maintaining a steady stream of revenue to a media that for more than a decade has ignored lawsuits accusing the hospitals of killing and maiming their patients.

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Twitter: @answersforlisa
www.northeasthealthclaims.com
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