CFO change at Allina after nursing strikes cost system $105 million

Allina Health will be getting a new CFO after the system posted a $67.7 million operating loss for the third quarter following two separate nursing strikes in 2016.

Those strikes—a seven-day walkout in June and a longer strike lasting from Sept. 5 to Oct. 16—cost Allina $104.8 million to hire 1,400 replacement nurses to keep its five Minneapolis-area hospitals operating. The total number will likely increase with the fourth-quarter financial report, which includes the last 16 days of the strike.

Without the strike expenses, Allina would have had an operating income of nearly $17 million for the quarter, which still would have been a decrease from 2015.

“The decrease in operating income was due primarily to softer than expected hospital volumes coupled with continued investment in clinical service line capabilities and the redesign of the primary care clinical delivery model,” the company said in its financial report.

The system’s revenue did increase during the same time period, going up by 4.6 percent over the third quarter of 2015, with outpatient admissions and surgeries increasing and inpatient admissions remaining flat.

The financial report included the announcement that current Allina CFO Doug Gallagher would be resigning at the end of 2016. He had been the longest-tenured financial chief in the company’s history, serving since 2009.

Taking his place will be Richard Magnuson, Allina’s vice president of finance and treasury. Magnuson was served as a CFO before at City of Hope in Duarte, California, and Fletcher Allen in Burlington, Vermont.