Published March 22. 2013 4:00AM Updated March 22. 2013 4:23PM
New London - The three unions at Lawrence + Memorial Hospital said Wednesday that recent layoffs and reductions of work hours are unjustified, given financial information the hospital has presented to Rhode Island state officials as part of its bid to buy The Westerly Hospital.
Since Jan. 1, L+M has laid off or reduced the hours of 22 workers, hospital spokesman Mike O'Farrell confirmed Thursday. These are in addition to the previously announced layoffs of 22 employees in November.
"Things are fluid right now," said O'Farrell. "There's constant adaptation to what's happening in health care. We're in a constant challenge to find ways to provide the best care at the lowest possible cost. But no services have been impacted."
Food services and occupational health were the departments most impacted, O'Farrell said. Some reductions were also made in wound care center and rehabilitation services.
Financial information submitted in connection with the bid shows L+M is fiscally strong and did not have to lay off either group, the union said in a news release.
"We're not looking to stop the sale of Westerly Hospital, but we want answers to the claim that they have no money, yet they present to Rhode Island officials that they have $200 million in liquid investments," said Harry Rodriguez, president of L+M Healthcare Workers Union Local 5123, one of three AFT Connecticut unions at the hospital.
Rodriguez was referring to a presentation L+M attorneys made at a recent sales hearing in Rhode Island in which they stated that L+M had enough cash to fund operations for 200 days and unrestricted investments in excess of $200 million. According to the presentation, L+M has an A+ bond rating with Standard & Poor's and Fitch.
"I'm troubled by the fact L&M has committed to maintaining staff at Westerly while they are laying off staff here," said Stephanie Johnson, president of L+M LPN/Techs Local 5051. "Especially when they have $69 million to purchase Westerly."
O'Farrell, however, said "there's never been an assertion that the hospital or L+M corporation is financially unstable. Both entities are financially stable based on sound and responsible budgeting, and sometimes that requires difficult decisions to keep it that way."
He said, however, that hospital administrators are "profoundly worried about the future" given projections for flat or declining patient volumes and state and federal cutbacks, and are working to position the hospital to weather the changes.
Rodriguez said L+M had an operating margin of more than 6 percent before it moved funds into Lawrence + Memorial Physician Association, a hospital subsidiary, to lower the hospital margin to 1.75 percent. The lower margin was the reason given for the November layoffs, so the hospital would continue to meet the Board of Directors' goal of a margin no lower than 3 percent. An unfair labor practice charge brought by the union over L+M shifting jobs to L+MPA is pending with the National Labor Relations Board.
O'Farrell said the information from the union about hospital operating margins is incorrect. L+M Hospital had a 6 percent operating margin for fiscal 2012, but the entire L+M corporation, which includes L+MPA, the Visiting Nurse Association and other entities, had just a 1.75 percent margin. The board set the 3 percent goal for the corporation.
O'Farrell said no funds were moved from the corporation to L+MPA.
AFT spokesman Eric Bailey said that what he termed the contradictory financial pictures L+M is presenting in Rhode Island and Connecticut should cause Rhode Island regulators to exercise caution in how they plan to hold L+M to commitments about how it will run Westerly Hospital.
"It should give them pause," he said. "It's clear they've got the money to do it (buy Westerly Hospital.)" But the layoffs in Connecticut, he said, raise questions about L+M's commitment to patient care and the community.
The Rhode Island Department of Health and Office of the Attorney General will host the next public meeting on the proposed sale of Westerly Hospital from 4 to 5:30 p.m. and 6 to 7:30 p.m. Wednesday at Westerly Middle School.