Editor's note: This version corrects the number of employees at Backus and Windham hospitals.

Hartford HealthCare, which includes The William W. Backus Hospital in Norwich, on Wednesday announced staff reductions and program changes as the health care system deals with large cuts to state and federal reimbursements.

“Despite our best efforts to reduce costs and increase revenues this year, Hartford HealthCare faces additional Medicaid cuts, bringing our total Medicaid payment reductions from the State of Connecticut to more than $100 million over five years,” Jeffrey Flaks, executive vice president and chief operating officer, said in a letter to staff on Wednesday. “The magnitude of these cuts makes our model unsustainable going forward.”

The biennial state budget passed by the General Assembly earlier this month includes higher taxes on hospitals and free-standing surgery centers owned by hospitals, among other impacts. Hartford HealthCare officials estimated the new budget will cost Backus alone $6.2 million over the next two fiscal years.

Hartford HealthCare’s announcement comes two days after the Yale-New Haven Health System announced it was closing clinics in Branford and East Haven because of the higher state taxes and lower Medicaid reimbursements.

Hartford HealthCare will eliminate the equivalent of approximately 335 full-time positions from its total workforce of 18,000, through a combination of retirements, attrition, job reductions and layoffs.

This will affect 418 positions throughout the system. Rebecca Stewart, spokeswoman for Hartford HealthCare, said 23 of the positions are at Backus, including 20 full-time equivalents.

At Windham Hospital, 119 positions will be affected, including 84 full-time equivalents. Backus has 1,760 full-time, part-time and per diem employees, while Windham Hospital, the smallest of the five acute care hospitals in the Hartford HealthCare network, has 672.

The layoffs announced Wednesday come about one year after Hartford HealthCare laid off 350 workers system-wide, including 68 at Backus.

In addition to five acute care hospitals, the network includes three behavioral health hospitals and eight other health care organizations.

The layoffs announced Wednesday will affect all areas, from management to administration to front-line staff, Flaks said.

Hartford HealthCare also is reviewing changes including consolidations and reductions to some programs and services to create additional efficiencies and lower costs, the hospital network said in a news release. Specific details still are being developed.

The system has reached out to its vendors of products and services and sought additional price reductions and cost-containment initiatives. As a result, Hartford HealthCare will spend about $40 million less for products and services in the coming fiscal year.

“This is significant. Hartford HealthCare is a true economic engine for our regions and our entire state,” Flaks said. “Besides being the largest employers in many of our towns, our projects provide substantial private capital investments for many of our communities. The goods and services we purchase — many in our state — create a demonstrable positive economic impact. Our community benefit investments support vital efforts to improve the quality of life.”

Flaks stressed the importance of continuing to invest in the jobs, technologies and facilities that are needed to be successful in the new world of health care. These include a large-scale initiative to launch the Epic electronic health record and create a strong platform for data analysis.

The system just opened its new Hartford HealthCare Cancer Institute facility at The Hospital of Central Connecticut, a 40,000-square-foot facility to enhance cancer care and coordination in the region.

Additional areas of continued focus include development of patient-focused service lines for orthopedics, neurosciences, cancer and cardiac care; and development of new outpatient options in ambulatory care centers throughout the Hartford HealthCare service area, according to the news release.

“Contending with these additional cutbacks has led us to some of the most difficult and painful decisions we have to make,” Flaks said. “Yet, it is essential that we do everything we can to remain viable and strong for those who rely on us for care.”

j.benson@theday.com

Twitter: @BensonJudy