LA Times: Workers strike at hospital where CEO got $5-million retirement plan

NewsJune 22, 2011

From The Los Angeles Times:

About 850 workers at a Salinas public hospital went on strike Tuesday, about two months after revelations of a multimillion-dollar pension awarded to the hospital’s CEO.   

Caregivers at Salinas Valley Memorial Hospital walked off their jobs at 6 a.m., according to representatives of the National Union of Healthcare Workers. The workers are protesting proposed layoffs and cuts to their retirement benefits as well as pay given to hospital executives and consultants.

The Times reported in April on the retirement package granted the hospital’s outgoing chief executive, Samuel Downing, which included about $5 million in supplemental payments along with a $150,000 annual benefit. Hospital officials and board members have defended the package, saying that Downing was a successful leader throughout his 27 years as CEO.

The hospital workers’ union has been negotiating with administrators since January and indicated its plan to strike earlier this month, according to union vice president John Borsos.

“There’s a sense of disbelief here that the hospital can come up with millions of dollars for Downing’s retirement and millions for their consultants, but when it comes to caregivers by the bedside, they say they can’t find the money,” he said.

Salinas Valley spokeswoman Adrienne Laurent said the proposed layoffs are primarily tied to the recession. The hospital has seen a 21% decline in patient admissions over the last four years, she said, and has already reduced the number of management and full-time-equivalent positions.

“We must bring our staffing levels in line with the actual resources needed to operate the hospital,” she said in a statement. “We believe this burden needs to be shared by all.”

The statement did not mention Downing, but did respond to criticisms of the hospital’s use of the consultant Wellspring Partners, which has received about $7.5 million in the last year. Laurent said the firm had helped the hospital trim $55 million in costs, “meaning the hospital will receive $7.5 dollars in savings for every dollar spent on consulting.”

The hospital, which has annual operating expenses of about $380 million, is a public entity that receives some taxpayer funding. The five elected board members who oversee it have declined interview requests by the Times.

Borsos said the strike is scheduled to last 24 hours but that there was a possibility workers would be locked out for the remainder of the week.