Article published Sep 25, 2012
UMass Memorial Health Care to eliminate 140 positions
By Bob Kievra TELEGRAM & GAZETTE STAFF
WORCESTER — UMass Memorial Health Care said Tuesday it will eliminate 140 positions as it seeks to find $80 million in budget cuts and new revenue for the fiscal year starting Oct. 1.
The latest round of financial challenges comes after the region's dominant health care system laid off about 150 people in the spring to help close a $50 million shortfall for the fiscal year ending Sunday After forecasting a $60 million surplus, officials said, they would be satisfied ending the fiscal year with a surplus of $5 million to $10 million.
“It's been a really difficult year for us,” said John G. O'Brien, president and chief executive officer. “Unfortunately, it affects many of our employees.”
The newest layoffs, scheduled over the next three months, include unionized workers and nonunion management positions.
They are part of a package of cuts and revenue enhancements for fiscal 2013 designed to bring expenses in line with revenue for the $2.4 billion, 13,200-employee system, which is losing patients, spending more on free care and writing off more bills that patients cannot pay.
“Obviously, a lot of this is unpleasant,” Mr. O'Brien said. “Our trend line relative to expense growth has been really reshaped. We think this is a permanent change in health care.”
The layoffs will include nursing staff, but a detailed breakout of positions wasn't available Tuesday. The reductions will include cuts at the system's medical center, medical group and corporate areas including fiscal, information services, marketing and communications. In addition to layoffs, some beds will be cut, management functions will be consolidated and some leased facilities will be pared, officials said.
“A lot of the challenges have been how to take expenses out of the system,” Mr. O'Brien said. “But rest assured, we're not going to walk away from a lot of programs. And we're not compromising safety.”
The Massachusetts Nurses Association, which represents about 2,000 nurses in two bargaining units in Worcester, said the cuts would harm patient care and come at the start of the flu season.
“We're past critical and now we have the start of influenza coming,” said Colleen E. Wolfe, a registered nurse and co-chairwoman of the MNA bargaining unit for the Memorial and Hahnemann campuses of UMass Memorial. She said two rounds of job cuts over the past two years have strained the system.
“It's all hands on deck,” she said. “We need them to stop feeling nurses are expendable.”
Officials said UMass Memorial, like many other health care entities, has been hard hit from declines in inpatient services, including cardiology medicine and women's services, coupled with declines in reimbursement from insurers.
Mr. O'Brien said significant strides have been made in making the teaching hospital more affordable to the 4,000 patients it cares for daily.
In a note to employees yesterday, Mr. O'Brien said, “It is imperative for us to continue the work we started in February and cut our expenses with expediency.”
UMass Memorial said inpatient admissions have dropped by about 5 percent, which was higher than the industry average. When that drop became noticeable earlier this year, the health care system laid off 150.
The decline in net patient revenue comes as UMass Memorial seeks a successor for Mr. O'Brien, who is stepping down next year after a decade on the job.
Earlier this month UMass Memorial completed the sale of its Home Health and Hospice business units to VNA Care Network and Hospice. It employed about 150 people and was losing money, officials said. VNA hired 37 of the employees and UMass Memorial will likely break even on the sale, said Chief Financial Officer Todd A. Keating.
Many hospitals in Massachusetts are cutting costs as public and private health insurers push providers to curtail medical spending.
Boston Children's Hospital said earlier this month it was eliminating 255 positions, resulting in 45 employees losing their jobs.
UMass Memorial, which operates University, Memorial and Hahnemann campuses, posted a $27.9 million surplus in its 2011 fiscal year, down 67 percent from 2010. For fiscal 2013, the system is hoping to generate a $60 million surplus, money that helps fund new facilities, technology and pension plan contributions, officials said.