Published June 02. 2014 4:16PM Updated June 03. 2014 12:08AM
Norwich — Hartford HealthCare announced plans Monday to eliminate 350 jobs from its multi-hospital network, including 68 at The William W. Backus and Windham hospitals.
Rebecca Stewart, director of media relations for Hartford HealthCare, said 68 full-time positions would be cut in a variety of departments at Backus and Windham. She said she could not provide the breakdown of how many layoffs would occur at each hospital.
Backus, which joined the Hartford HealthCare network last year, has 2,003 employees, while Windham has 744. Hartford HealthCare has a total of 18,000 employees. Decisions about layoffs will be based on patient volumes in various departments, she added.
Hartford HealthCare is “doing this from a position of strength,” Stewart said, and currently has a 1.8 percent to 2 percent margin of revenues over expenses.
“It is taking painful steps like this in order to remain strong,” she said. “This really is about making health care more affordable. We have a national mandate to do that.”
Hartford HealthCare has taken several actions recently to become more efficient, including reducing duplication of services, creating strategic partnerships with the Memorial Sloan Kettering Cancer Alliance and a clinical affiliation with CVS Caremark, Stewart said.
David Whitehead, president of the Hartford HealthCare East Region, said in a letter to staff that Windham Hospital’s inpatient volume has declined 21 percent this year compared to a year ago, while volume at Backus has declined 6 percent, and both are part of a national trend toward inpatient declines. A $14.1 million shortfall in government reimbursement for care provided at the two hospitals is projected for the coming year, he said.
Whitehead said workers designated for layoffs would be informed by the end of this week, and support and assistance would be made available to them.
“The environment in our core business has changed forever, and our operating model needs to change as well,” he said.
Jeffrey Flaks, chief operating officer of Hartford HealthCare, said in a letter to staff that the network has reduced nonstaff costs by more than $200 million as part of recent efficiency initiatives, but layoffs are still necessary to bring the staff size in line with patient volume and economic conditions. “Massive reductions” in government reimbursements, coupled with an expected 25 percent drop in inpatient business by 2020 and a shift from private to government insurance programs all are impacting hospitals, he said. At the same time, the network must continue investing in new technology, he added.
The layoffs announced Monday are the second round in the last seven months. In November, Hartford HealthCare laid off 179 employees, including 10 each at Backus and Windham.
At the region’s other hospital, Lawrence + Memorial in New London, the administration has been poring over recommendations from a consultant about how to cut costs, and indicated last month that staff reductions through attrition and layoffs are possible.
“Our hope is that any staff issues will be taken care of through attrition,” L+M spokesman Mike O’Farrell said Monday.
“Every hospital is facing the same challenges,” he said. “It’s our hope there will not be layoffs,” but no hospital can make that guarantee in the current climate.
Michele Sharp, spokeswoman for the Connecticut Hospital Association, said hospitals statewide are facing “unprecedented financial challenges.”
Connecticut hospitals, she said, are absorbing a $103 million loss in funds due to a rescission enacted in December 2012, and are also coping with cuts in state funding and a tax on hospital patients that adds up to more than $230 million each year. In addition, there have been cuts to Medicare payments and the federal sequestration, resulting in a cumulative 2 percent cut to Medicare funding.
In 2013, Connecticut hospital operating income was down by $175 million, she said.