North Adams Regional Hospital Cuts Staff
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Workers were informed of the reductions in jobs and hours on Tuesday; the exact number of people affected won't be known until next week because of "bumping" rights that allow those with more seniority to move into other positions.
The reductions are expected to save some $213,000 and follow the freezing or elimination of nonunion positions last month that included seven executive management jobs.
Northern Berkshire Healthcare President and CEO Richard T. Palmisano II laid the blame for this round of layoffs on the failure of the hospital's two unions, the Massachusetts Nurses Association and Service Employees International Union 1199, to reopen their contracts.
The health system is being buffeted by the worsening economy and saw the bulk of its profits last year eaten up by a $1.2 million charge to cover workers' pensions decimated by the flailing stock market. In addition to cutting administrative staff last month, it's reduced non-union salaries and benefits, slashed supplies, training, advertising and other nonessentials, and renegotiated vendor contracts for total savings of $4.2 million.
"We worked hard to avoid hitting people," said Palmisano. "We were disappointed that we weren't able to achieve greater flexibility in contracts because had the unions allowed us to reopen these contracts to remove these excessive benefits, these legacy costs ... there was a time when health care could afford those benefits, it certainly isn't now."
"If they had [reopened contracts] we wouldn't be having this conversation," he said. The hospital had hoped to save some $650,000 by renegotiating.
The union locals had been resistant to opening contracts, fearing hard-won pay raises and benefits would be lost. The hospital was asking for changes in overtime policy and pay, filling open shifts and freezing scheduled raises.
Late Tuesday, SEIU proffered a formal proposal to reopen their contract, which Vice President of External Affairs Diane Cutillo said NBH officials think "is a good-faith effort on their part."
SEIU had provided the hospital with cost-cutting proposals a couple of weeks ago.
Many of the positions affected in medical imaging, medical surgical nursing, respiratory therapy, rehab services, housekeeping, Greylock Pavilion and surgical services are covered by SEIU. A total of 3.7 full-time equivalent jobs will be lost along with 1.3 FTEs by reducing position hours.
The hospital recovered from years of fiscal ailments only to emerge into what some are describing as the worst economic downturn since the Great Depression. It ended fiscal 2008 with a plus of $1.43 million — which disappeared along with the economy.
"When we reported our year-round results they were celebrating," Palmisano said of NBH's board of trustees. "And I said, we'll just have our moment of celebration and then we'll talk about next year."
A combination of investment losses, falling admissions, high-vacancy rates at Sweet Brook Care Centers and Sweetwood Retirement Community, an aging population, high poverty rate and low Medicare reimbursements rates are hitting NBH hard. Some factors, such as falling admissions and services, are affecting community hospitals across the nation.
NBH is currently in technical violation of its $52 million in bond requirements and has until Sept. 30, the end of the fiscal year, to improve its amount of cash on hand and debt service ratio.
"We believe that is going to be a substantial challenge," said Palmisano, "If you're losing money every month, it's not going in the right direction ... you need to have positive results to have a positive debt-service ratio."
