A Medical Device Daily

A broad legal backstory was added this week to the current, broadly-publicized shortage of nurses in the U.S., with a group of class action suits filed against hospitals in Chicago, San Antonio, Memphis, Tennessee, and Albany, New York, charging that they conspired to put a cap on nurses' wages.

Daniel Small, the attorney heading up representation of the nurses, said at a news conference in New York that as a result of information exchanged between the hospitals – and the subsequent alleged agreement to hold down their salaries – nurses working at the named hospitals lost an average of $6,000 a year. He said the yearly loss was as much as $14,000 a year for nurses working at hospitals in the Memphis area, with the lowest loss of $1,300 annually in the San Antonio area.

According to Small, the scheme was carried out, in part, by the hospitals not agreeing to compete in terms of wage scales, the allegation based, he said, on interviews with former and current hospital officials. He said the lawsuits filed in the four cities could be the first of many other filings.

The hospitals named responded to the allegations either by saying that they had not seen the particulars of the lawsuits or by denying the charges.

In leveling the allegations, Small said that rather than setting nurse wages by “secret agreements,” these wages should be based on market forces. Nurses involved in the filings said that the alleged caps on wages – along with stressful working conditions and an epidemic of under-staffing – are one of the reasons for nurses leaving the profession.

Small said that the hospitals had developed no formal agreements that they wouldn't compete against one another but that the agreements made came often from informal conversations and other exchanges of information to develop “assurances and understandings” that they would not outbid each other. He also cited the sharing of salary information between human resource officials.

In reporting on the story, the New York Times quoted a spokeswoman for the Metropolitan Chicago Healthcare Council, who acknowledged that the group had conducted salary surveys but that these were simply a method of gathering market information “with the guidelines of the antitrust laws,” developed to prevent collusion.

Another underlying theme of the controversy was pointed to by some of the hospitals that said the lawsuits were a stalking horse for unions in their attempts to unionize nurses.

Small acknowledged that the union had supplied information in developing the suits, and the Times said that the Service Employees International Union (SEIU) has been attempting to organize nurses from at least one of the Chicago-area hospitals, Advocate Health Care (Oak Brook, Illinois).

Andy Stern, president of the SEIU, representing about 84,000 nurses in the U.S., said that the lawsuits “reveal that there are certain ways nurses are not valued in our country, and we say that has to stop.”

In its coverage of the controversy, the Chicago Tribune quoted Heidi Hartman, head of the Institute for Women's Policy Research (Washington), who said her group's research pointed to the conclusion that “something seems to be holding nurses' wages down.” She cited two possibilities for this: collusion among healthcare officials, and gender bias, in that nine out of 10 nurses in the U.S. are women.