Allina Health's nursing strike costs reached $149M in 2016

Minneapolis-based Allina Health saw revenues increase in 2016, but the 13-hospital system's operating income plummeted in the 12 months that ended Dec. 31.

Allina revenues increased 4 percent year over year to $3.9 billion in 2016, which was attributable to net patient service revenue growth, according to recently released bondholder documents. Although inpatient admissions and surgery volume decreased year over year, Allina said outpatient admissions were up last year compared to 2015.

The system recorded an operating loss of $30 million in 2016. That's a significant change from the operating gain of $149 million Allina posted in 2015.

Allina's operating loss was largely attributable to expenses related to two strikes called by the Minnesota Nurses Association. Allina said it incurred $149.3 million of strike expenses in 2016. However, that number could change, as Allina is still working out costs with vendors it hired during the strikes. The system said the final number will be published in late March.

The nurses association authorized a strike in June after Allina nurses overwhelmingly rejected an offer by the health system that would have eliminated union-backed health insurance and moved the workers to its corporate plans. During the seven-day strike, Allina brought in 1,400 replacement nurses.

Health benefits were again the sticking point when Allina nurses went back on strike September. The six-week strike ran from Sept. 5 to Oct. 16.

Due to strong performance by its investment portfolio, Allina ended last year in the black. Allina recorded net income of $46.9 million in 2016, down from net income of $130.5 million in 2015.

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