Berkshire Health Systems Cuts Staff to Stem $11M Loss
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The reduction will affect the equivalent of 94 full-time employees, or approximately 124 individuals working full and part-time within Berkshire Medical Center and Berkshire Health Systems. The cuts are about 3.7 percent of the work force, and will include management, unionized and non-union positions, according to a statement from Berkshire Health Systems.
Over the past two years, and particularly in 2010, BMC, like many of its counterparts across the state and nation, has experienced a sharp decline in patient volume for inpatient and outpatient services, including diagnostic testing and physician services, among others. According to the release, since last October 2009, BMC has experienced a loss of $11 million in patient revenue that is directly related to the reduction in patient volume. Inpatient discharges alone have declined by over 7 percent in the past two years.
"This is very painful, and was undertaken only after all other cost-reduction alternatives were examined and implemented, including not filling open positions unless absolutely necessary, restructuring administrative and clinical services for better efficiency, renegotiating vendor contracts, using group purchasing programs and other measures," said Diane Kelly, BMC's chief operating officer.
Kelly said the reductions directly correspond to the decline in patients. "Thanks to a comprehensive range of services and dedicated clinicians, BMC remains well positioned to weather the future economic climate of health care."
“The reductions correspond directly to the decline we have experienced in our patient volume, supported by workflow changes and efficiencies in non-patient care areas, and this allows us to maintain the same excellent level of care that our community expects."
BMC officials said the drop in patients can be linked to changes in health care coverage by economically stressed businesses, which are opting for increased deductibles and co-payments or abandoning employees to state plans that reimburse at lower rates.
"Facing changes in their coverage, including increased deductibles and co-payments, many patients are finding it necessary to defer care whenever they possibly can," officials said in the release.
BMC is not alone. According to a report by the American Hospital Association surveying nearly 1,100 community hospitals nationwide, the majority are reporting fewer patients seeking inpatient and elective care. The report showed that, as early as March of 2009, 59 percent of hospitals reported either a moderate or significant decrease in elective procedures, while 55 percent reported a moderate or significant decrease in inpatient admissions. The national study showed that 9 of 10 hospitals have initiated cutbacks to address economic challenges, including nearly half reporting reductions in staff.
Northern Berkshire Healthcare is also struggling with low-patient volume and reduced reimbursements. It cut staff last year and its financial woes have increased tension in recent contract negotiations.
BMC said work-force reductions are expected to begin in mid-September. Employees and unions are being notified of the changes and the health system said it will aid those affected with assistance including severance pay, career counseling and other job-search skills.
