Southcoast announces restructuring that will impact some jobs

Patient safety and quality care continues to be top priority and will not be affected by the changes

FALL RIVER, Mass. — Southcoast Hospitals Group today announced it would eliminate 93 positions in a restructuring that was triggered in large part by lower reimbursement expected from the Commonwealth of Massachusetts and Medicaid managed care payors.

It is estimated that, by the time Southcoast's unique "deployment process" is completed in six months, approximately 20 to 40 people will actually be laid off.

Patient safety and quality care continues to be Southcoast's top priority and will not be affected by the changes.

"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," Keith A. Hovan, President & CEO of Southcoast Hospitals Group, said in a letter to all employees on Thursday, August 20.

In his letter to employees, Hovan wrote: "This is one of the most difficult letters I will ever have to write, because some of our very dedicated colleagues will be learning that their positions have been eliminated. Doing so requires us to make decisions — some of which are painful and all of which we take very seriously — to ensure that Southcoast continues to be here to serve those who count on us, every day, for their most pressing health care needs."

Hovan also said the hospital continues to be squarely focused on quality of services and exceptional patient care. "We assure our communities, medical staff and employees that the proposed cuts will not impact the level of patient care or patient services being provided by Southcoast hospitals and its affiliates. 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.

All non-union employees whose positions were eliminated are eligible for Southcoast's deployment process, which has been used very successfully in the past to find other positions for the majority of people who are affected by the elimination of a position. During the six-month process, affected employees receive their current rate of pay, the same number of hours and the same schedule. Union employees at Tobey Hospital, the only hospital with unions, will be addressed according to the terms of their current contract.

The positions eliminated span across many departments at all Southcoast sites and locations and includes clinical, support, union and non-union and administrative staff. It also includes five leadership positions, which are in addition to four leadership positions eliminated in January.

Fiscal challenges facing Southcoast and all hospitals

During the past several months, Southcoast has been addressing significant financial issues that confront Southcoast as well as every other health care organization across the region.

Despite the downturn in the economy, Southcoast has been able to achieve a positive operating margin largely because of the tremendous efforts put forth by hospital leadership and staff this year. While many other organizations already announced large layoffs and other actions, such as pay cuts, Southcoast has had to make modest changes this year with a minimal impact on its workforce. Without these proactive steps, Southcoast would have been facing much more severe cuts and layoffs.

"Southcoast has been a fiscally well-run organization over the years," Hovan said. "We have been attentive to the management of costs, effectively flexing our expenses as volumes and our average daily census decreased. We also introduced new tools, such as Lean and Six Sigma, that helped us save several million dollars this year.

"In health care we have the unfortunate additional challenge that government payors, 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. This decrease in payment — particularly by the Commonwealth of Massachusetts and Medicaid managed care plans, such as BMC HealthNet — has impacted us since July of this year, and will extend through all of our next fiscal year," Hovan said. More than two-thirds (71 percent) of Southcoast's payments come from either the federal (Medicare) or state (Medicaid) governments.

Southcoast also announced a pay freeze for all employees during Fiscal Year 2010 and will continue to reevaluate its health insurance benefits, which after wages is the single largest item in its budget, costing about $35 million annually.

"These are certainly challenging times 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. We also deeply appreciate our employees and medical staffs' support for the budgetary actions, including the wage freeze, which will save about 200 other jobs that would have been reduced without such action. We will also continue to build Southcoast for our future. Most importantly, we will fulfill our mission of Ôcaring for the health of our communities' by providing excellent patient care each and every day."

As the region's largest employer with some 6,000 employees, Southcoast has always taken a financially responsible and conservative approach to managing its operations and implementing capital improvement projects or expansion plans. This approach has served Southcoast extremely well since the merger of Charlton Memorial Hospital in Fall River, St. Luke's Hospital in New Bedford and Tobey Hospital in Wareham in 1996, helping to weather periodic economic downturns better than many other hospitals in Massachusetts. Southcoast continues to invest in new technologies and growing services in an effort to be able to better address the needs of the community and these challenging economic times.