News & Events

Cooley Dickinson Hospital, citing $4 million to $5 million shortfall, lays off 30-plus employees

By Kristin Palpini

Created 05/04/2010 – 16:09

NORTHAMPTON – Cooley Dickinson Hospital today is laying off what amounts to 30 full-time employees to cover what hospital officials say is a multi-million budget shortfall.

The layoffs mark the third time during this recession that Cooley Dickinson, the Pioneer Valley’s sixth largest employer has laid off workers. The term "full time equivalent," or FTE, is an employment measurement that refers to 40 hours of work per week, but does not denote how many employees make up those hours. Three part-time employees, for example, could count as a single FTE.

Layoffs are not the only cutback Cooley Dickinson is making to offset the $4 million to $5 million mid-year budget gap. Some workers are seeing hours reduced by an average of 5 ½ hours each per week. An early retirement option is also being offered to some employees in an attempt to avoid more layoffs.

Overall, the job and hour reductions will affect about 30-50 FTEs including registered nurses, licensed nurse practitioners, managers, and non-clinical staff. No senior administrators will be impacted by the cuts, however two vacant senior positions will remain unfilled.

Patti Williams, a representative for the Massachusetts Nurses Association, which represents the 250-300 registered nurses at Cooley Dickinson, said early retirement and hours reduction options should eliminate the need for registered nurse layoffs.

However, she was critical of staff reductions overall.

"We do understand there are layoffs in other departments and we are very worried about that. It’s not like anyone is sitting around up there," Williams said. "We have an on-going concern about the ability of the hospital to function in terms of those that are connected to the giving of care – and that’s the nurses, the technicians, the housekeeping, transportation, all of those services are vitally important to maintain safe, quality patient care. When you start cutting back at that level of personnel you are harming patient care."

Craig N. Melin, president/CEO of Cooley Dickinson Hospital, contends that staff reductions will not affect patient care. He said staffing levels at the hospital would not change as a result of the cuts. Departments where demand for services has dropped off would have less staff, while departments that are expanding would have more staff, he said.

"There have been drops in volume so there will be corollary staffing where there are not patients in those programs," Melin said. "We found other places where staffing can be increased."

Jobs are being cut to help the hospital make up for an unanticipated $4 million to $5 million mid-year budget gap, said Melin. Other measures, including changing the hospital to all single-bed patient rooms and increasing services in 12 departments, pediatric surgery among them, are also being implemented to increase revenue and position the hospital for future success, Melin said.

Mid-year gap

The shortfall, Melin said, is largely attributable to an insurance hike implemented this winter by the state and some other employers. He said they increased health insurance premiums and co-pays for employees halfway through the year. According to Massachusetts’ Group Insurance Commission, the mid-year hike was made to address a $35 million deficit in the agency’s budget this year.

With four of the Valley’s top 15 employers run by the state – including the second largest employer, the University of Massachusetts Amherst – Cooley Dickinson Hospital was adversely affected by the change.

Melin said when co-pays and premiums go up, some people decide to skip doctor and hospital visits to save money, thus the decline in revenue for Cooley Dickinson.

Starting in January, outpatient volume for procedures such as CT scans, rehabilitation and cancer screenings at Cooley Dickinson fell by 20 to 30 percent, Melin said. Meanwhile, inpatient care dipped slightly.

"This just sort of all hit us at once," said Melin. On top of that, he said, is the negative impact the recession has already had on the healthcare industry.

"Most of our costs are people, so it results in a loss of jobs at the hospital," he said.

This reduction is the third time since 2008 that the hospital, Northampton’s largest employer with about 1,800 employees, has had to cut staff, as well as implement other cost-saving measures.

In 2008, the hospital laid off or cut hours for 81 employees. In November 2009, when Cooley Dickinson was facing a $10 million gap, the hospital laid off 20 to 25 employees and negotiated employee concessions on delayed raises, changes to sick time and pensions.

"Changes are aimed at positioning for 2011, to be effective in this fee-for-service environment and to move sooner rather than later in the population approach," Melin said. "We’re all working toward advancing to keep people healthy."

Change at Cooley Dickinson

Administrators at Cooley Dickinson Hospital began informing employees of layoffs and hour reductions today.

About 16-17 FTE registered nurses’ jobs will be affected. However, Williams said the union had not received any official notification from the hospital on the number of nurses that could be impacted.

Some of the hospital’s nurses are being offered early retirement options that would not affect their pensions, but would allow them to stay on the hospital’s health insurance plan until they become eligible for Medicare. They would also receive a severance package. Some of the older nurses are also being offered the opportunity to reduce their hours without losing the healthcare coverage offered to full-time employees.

Melin said this plan was devised along with the Massachusetts Nurses Association. A significant number of the hospital’s nurses are age 60-65, he said. "The hospital wanted to come up with a reduction strategy that preserved the future of the nursing staff, the younger nurses, while providing for the older staff, Melin said.

Williams, of the MNA, described the retirement option as a "good offer." In about a week, the MNA will find out how many nurses are taking advantage of the option.

Because of these measures, Williams is hoping that no registered nurses will be laid off. However, if the need for layoffs occurs, because the nurses are unionized, the hospital would inform the union of the cuts, according to Melin.

Under the nurses’ contract, more senior employees can bump less experienced workers during layoffs. There are also 13 vacant positions at the hospital that nurses could move into, said Melin, and there is the retirement option officials hope some nurses will take.

However, 30 FTEs will be laid off. Melin said about half of these employees are clinical staff and the other half are not.

It is unclear how many employees could have their hours reduced by an average of 5.5 hours per week.

Cooley Dickinson will be providing severance pay for laid-off employees of one or two weeks per every year of service with a cap of 12-16 weeks. The hospital will provide job placement assistance and continue to subsidize health insurance coverage through COBRA.

Some expansion on horizon

Meanwhile, the hospital is expanding programs in a dozen areas and changing double occupancy patient rooms into single-bed rooms. Melin said the change is meant to attract more patients who may see not having to share a room as a good reason to chose Cooley Dickinson. It also can reduce the risk of infection to patients.

Williams said she hasn’t heard anything negative about the room occupancy change.

"It creates a more peaceful atmosphere for the patients," she said.

Patient room changes will not affect the number of people who can be treated at the hospital, Melin said. The hospital will continue to be licensed for 142 beds, he said. Should the hospital need more room in an emergency, or if a patient requests it, a second bed can be wheeled into a single room to accommodate an additional patient.

Hospital services that will be expanded include cancer care. A new radiation oncology system has been installed at the hospital which should shorten daily treatment times and deliver more precise doses of radiation to the tumor, according to the hospital. Also a fourth oncologist has been added to the medical staff.

Other expansions are in the areas of: pediatric surgeries; gastroenterology; pulmonary; urology; expansion of surgeries in the areas of urology; orthopedics/spine care; ear/nose/throat; and general surgery.

"These are hard times for everyone," said Melin. "But by assessing our situation early, we have been able to identify more opportunities for revenue and to make better choices among tough options, thus impacting fewer people."

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