Lifespan announces pay freeze, other planned cutbacks

PROVIDENCE – A pay freeze for all Lifespan employees, cutbacks in education and training benefits and the elimination of the nonprofit health care system’s service-credit program are among the elements of an austerity plan the nonprofit announced to its staff last week. The plan also includes pay cuts for the senior management of Lifespan and its hospitals.
In an e-mail to Providence Business News, the health care system said its Performance Improvement Plan was spurred by “financial shortfalls resulting from declining Medicare [and] Medicaid reimbursements, increased numbers of un- or under-insured patients; reduced volume as patients delay or cancel elective procedures; decreased average length of stay; and reduced earnings from investments.”
“The plan is for all employees to forgo a salary / merit increase once,” the health care system said in an employee memo obtained by PBN. “Managers and directors have already given up the merit increase that had been scheduled to take effect on Jan. 1.”
The memo does not rule out work force reductions.
President and CEO George A. Vecchione – who in January agreed to forgo this year’s merit raise and accepted a permanent reduction in benefits – will take a further 10 percent reduction in his base pay, the memo said, adding: “These changes amount to an effective total pay reduction of 26 percent.” &#8226