health care

Southcoast Hospitals Group cuts 93 jobs

Management blames low government reimbursement rates

SOUTHCOAST HOSPITALS GROUP
CHARLTON MEMORIAL HOSPITAL in Fall River, above, is one of three nonprofit community hospitals in the Southcoast Hospitals Group health system.
Posted 8/20/09

FALL RIVER - In anticipation of lower reimbursements from the state and federal governments, Southcoast Hospitals Group announced Thursday it will eliminate 93 positions as it restructures operations.

Southcoast Hospitals currently has 5,692 employees at the three Massachusetts hospitals it operates: Charlton Memorial Hospital in Fall River, St. Luke’s Hospital in New Bedford and Tobey Hospital in Wareham.

Keith A. Hovan, president and CEO of Southcoast Hospitals Group, sent a letter to all employees today announcing the job cuts. The eliminated positions span all departments and facilities and will include five leadership positions, the group said.

“The impact of lower reimbursement from state programs such as MassHealth and BMC HealthNet require us to restructure the way we deliver care and manage our operations to remain fiscally sound,” he wrote in the letter. More than two-thirds of the company’s payments come from Medicare and Medicaid programs, according to Southcoast.

This dependence, Hovan said, forced the restructuring. “In health care we have the unfortunate additional challenge that government payers, such as the Commonwealth of Massachusetts and the federal government, have the ability to reduce what they pay us to provide care for Medicaid and Medicare patients,” he wrote.

Southcoast estimates its state reimbursements will fall by $19 million during the next fiscal year.

Hovan said the move will have no effect on the quality of care provided to patients at any of the group’s hospitals. “Patients and their families will continue to receive the high-quality services and care they have come to expect and depend on every day,” he wrote.

A statement from Southcoast said all non-union employees whose positions are eliminated will be eligible for the group’s six-month “deployment process.” Under the plan, the workers will receive their current rate of pay, as well as the same hours and schedule, while another position is sought for them.

Union employees will be dealt with according to their contracts, the hospital group said.

Southcoast spokesperson Joyce Brennan said that while 93 positions have been targeted for elimination, the group estimates that only 20 to 40 layoffs will actually be necessary after the six-month deployment process. “We will hopefully be able to reabsorb some of those people,” she said.

The hospital group also announced a pay freeze for the 2010 fiscal year that will save an estimated 200 jobs.

“The are certainly challenging time for Southcoast and for each of us as employees,” Hovan said. “We are committed to assisting each person impacted by a job elimination or change.”

Southcoast Hospitals Group – a subsidiary of Southcoast Health Systems, a nonprofit health care network based in Fall River – comprises Charlton Memorial Hospital in Fall River, St. Luke’s Hospital in New Bedford and Tobey Hospital in Wareham, Mass. Additional information is available at SouthCoast.org.

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