CNE layoffs in response to loss projections

By John Howell
Posted 5/2/17

By JOHN HOWELL Last week's round of layoffs at Care New England was triggered by estimates the institution comprised of Kent, Women and Infants, Butler and Memorial hospitals would experience second quarter losses worse than those being projected, James

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CNE layoffs in response to loss projections

Posted

Last week’s round of layoffs at Care New England was triggered by estimates the institution comprised of Kent, Women and Infants, Butler and Memorial hospitals would experience second quarter losses worse than those being projected, James Beardsworth, director of communications, said in an interview Friday.

Announcement of the layoffs, which Beardsworth said covered administrative as well as union and non-union positions, was made barely a week following disclosure that CNEW had signed a letter of intent to be acquired by HealthCare Partners of Boston. Under a separate agreement that also will require approvals from the Attorney General and the Department of Health, Prime Healthcare Foundation would acquire Memorial Hospital in Pawtucket. Prime owns and operates Landmark Medical Center in Woonsocket.

Beardsworth did not disclose a breakdown by hospital of the layoffs or a total number or projected savings. CNE employs 6,500 full-time equivalents. All hospitals were affected with the greatest impact being at Women and Infants.

However, if the numbers provided by Patrick Quinn, vice president of District 1199 SEIU New England, are an indication, cuts are not deep. Of the 2,300 employees represented by the SEIU at Women and Infants and Butler, Quinn said he knows of six who had been laid off. Questioned about contractual obligations, Quinn said union employees with four years of employment or less at Women and Infants were subject to layoff. The threshold at Butler is three years or less.

Beardsworth said the current health care environment “requires constant assessment of where we are.” He said CNE lost $13.9 million in the first quarter. He did not provide a figure on what projections were showing for the second quarter.

“These are not easy decisions,” he said. “We’re dedicated to our hardworking staff.”

Yet, he noted, the majority of operational costs are for personnel, and that is where cuts are being made. He assured CNE is not planning to eliminate through consolidation or reduce services at any of the hospitals, although, “we will look for ways to work with others.”

A point made by Beardsworth and Mark R. Marcantano, president and chief operating officer at Women & Infants Hospital,” is that improved health conditions for mothers and newborns has reduced revenues at the hospital.

“We’re seeing a significant impact on our bottom line,” Beardsworth said. A complicating factor is the 2 percent cap set by the state on the increase in insured payments, which Beardsworth said hasn’t allowed CNE to cover increased costs.

“We need to find a way to get relief from insurance caps,” he said.

In a statement, Marcantano said, “We must adapt to significant changes in health care delivery and payment, such as decreased population and births and advances that change the way we provide care. Our payer mix is worsening, and the volume in the NICU is likely not going to recover to the levels that we previously experienced, which presents new challenges, as this is a trend being seen elsewhere across the country. The irony, of course, is that this trend is good news from a public health perspective that there are fewer sick and premature infants. Unfortunately, that good news does have a significant impact on our financial health under our current payment systems.”

“It is hard for our membership to accept the idea that these proposed reductions will not impact patients,” Quinn said in a statement.

He suggested that in place of reducing staff positions that CNE review administrative costs. He said CEO Dennis Keefe is paid $1.4 million per year (according to recent IRS tax filings), adding, “If Mr. Keefe paid himself only $1 million, roughly $500 per hour, and other high paid administrators took a modest compensation reduction during these financially challenging times for CNE, many, if not all, of these announced layoffs could be averted.”

Beardsworth did not respond to comments about Keefe. He said CNE still has openings it needs to fill and the focus is directed at “maintaining access to care for the community.”

“As difficult as the changes are they are done in a manner to ensure care where they [the community] needs us.”

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