Updated 2:06 and 3:23 p.m.
PROVIDENCE – A week after it announced it signed a letter of intent to join Boston-based Partners HealthCare of Massachusetts, Care New England Health System said it is in the midst of restructuring to deal with ongoing financial challenges.
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CNE, in a press release issued Wednesday, said the “vast majority” of full-time layoffs occurred at Women & Infants Hospital, while reductions also took place at Kent and Butler hospitals and VNA of Care New England.
CNE did not specify the number of employees who lost jobs; a spokesman said the number will not be disclosed. CNE had approximately 6,580 full-time employees.
Patrick J. Quinn, executive vice president of District 1199 SEIU New England, said management at Women & Infants told the union it will try to layoff less than seven union workers.
Quinn said the membership at 1199 SEIU “will fight hard in the coming days to halt these proposed layoffs,” saying the hospitals already are understaffed. He said that management, such as CEO Dennis Keefe, should consider “modest” compensation reductions instead of resorting to layoffs.
“Appropriate staffing levels are vital to providing the quality care our patients deserve and have come to rely upon for decades,” Quinn said in a statement. “It is hard for our membership to accept the idea that these proposed reductions will not impact patients.”
CNE said employees were notified this week. Clinical and non-clinical staff, as well as union and non-union employees were affected.
Jim Beardsworth, system director of communications, said that the decision to restructure marks a difficult, but necessary, step during a challenging time for the health system. Beardsworth added it is not related to the announcement with Partners.
“We continue to make significant progress in our efforts to right our ship, but that comes with careful and painful decisions affecting dedicated and hardworking people … these decisions are the result of an ongoing and exhaustive review of our operations. CNE management has determined that reducing the workforce is a fundamental necessity given our current environment,” he said in a statement.
CNE said it also had layoffs in March but did not disclose how many.
Mark R. Marcantano, president and chief operating officer at Women & Infants Hospital, said the hospital has experienced reduced volumes, due to changing demographics, reduced inpatient neonatal care, a declining birth rate and a decrease in reimbursements.
“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,” Marcantano said in prepared remarks.
Marcantano, in a follow-up interview, said the number of births has been declining across the state, not just at his hospital. Recently released KIDS COUNT data said the number of babies born in Rhode Island to residents declined 15 percent between 2007 and 2016, from 12,010 to 10,212 births.
At Women & Infants last year, there were 8,800 births, which was approximately 400 more births than the hospital had been averaging. This year, deliveries are about 251 behind what they were in 2016, Marcantano said.
CNE said the decision to reduce its workforce came despite “extensive efforts” to improve the cost structure across the system, including improvements to the revenue cycle, growth of volume where possible in key service lines, and expense management.
It also said that CNE’s financial challenges are further compounded by “one of the nation’s most restrictive caps on commercial reimbursement rates” by the R.I. Office of Health Insurance Commissioner, “which are far outpaced by the annual inflation rate of medical costs.”
As part of last week’s announcement regarding Partners, CNE said it also plans to sell Memorial Hospital in Pawtucket to Prime Healthcare Foundation, the owner of Landmark Medical Center in Woonsocket. Memorial stopped delivering babies there last year, and CNE has been vocal about its operating shortfalls.
Care New England’s total operating revenue last year was $1.2 billion, and it had a $68.3 million operating loss; excluding one-time items, the loss dropped to $13 million.
Scott Jensen, director of the R.I. Department of Labor and Training, said that protecting jobs in Rhode Island’s health care sector is among Gov. Gina M. Raimondo’s top priorities.
“Today’s concerning announcement of layoffs at Women & Infants sharply underscores the need for the hospital’s parent healthcare system, Care New England, to get its fiscal house in order by partnering with a stable health care system. The Department of Labor and Training has already reached out to Care New England to offer Rapid Response services and help those affected by layoffs in every way we can,” Jensen said in a statement.
Lori Stabile is the PBN Web Editor.
