Allina Health's bottom line takes $20.4M hit from nurse strike

Minneapolis-based Allina Health saw revenues increase in the first six months of 2016, but the 13-hospital health system's operating income and net income fell in the first half of the year.

Allina revenues increased 4.1 percent year over year to nearly $2 billion in the six months ended June 30, according to bondholder documents. The financial boost was attributable to increased patient volume. Allina said inpatient admissions were up 0.5 percent and outpatient hospital admissions were up 3.1 percent in the first half of this year, compared to the same period of 2015.

The system said operating income decreased by 40 percent year over year to $54 million in the first six months of 2016. The decrease was largely due to strike expenses. Allina said it incurred $20.4 million of expenses related to the seven-day strike in June called by the Minnesota Nurses Association.

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

The latest talks between Allina and the Minnesota Nurses Association ended Aug. 1 with no agreement. The union plans to present Allina's latest offer to nurses for a vote Thursday.

Allina's operating margin for the first half of this year was 2.8 percent. Excluding the strike expenses, the system's operating margin for the first six months of 2016 was 3.8 percent.

The system recorded net income of $59.5 million for the first half of 2016, compared to net income of $135.9 million in the same period of 2015.

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