The Lifespan health care network will eliminate 269 jobs to deal with a multi-million-dollar budget shortfall.
Despite what Steven Baron, president of Rhode Island and Miriam hospitals called some of the strictest budgeting in the country, the two Lifespan member hospitals lost $8.6 million through the first quarter that ended Dec. 31.
The job cuts are a result of a reduction in Medicare reimbursements and the usual reduction in patient loads during the spring and summer months, Baron said. Medicare cuts in Rhode Island – part of a five-year federal plan that began last year – are expected to reach $220 million through the year 2002.
“These cutbacks are caused by deteriorating reimbursements from Medicare and other managed care providers,” Baron said.
In reality, fewer than 269 full-time workers are expected to be laid off, as Baron expects about 30 percent to find positions within the Lifespan network. That includes Bradley Hospital, the Visiting Nurse Association of Rhode Island, Hospice Care of Rhode Island, and New England Medical Center in Boston.
Lifespan expects to save about $16 million a year on operating costs as a result of the cutbacks. On top of the layoffs, another 237 positions staffed on a per diem or over-time basis are being eliminated, Baron said. Payroll will be reduced by about 9 percent, but only about 4 percent of the staff will be affected, he said.
The network is examining other ways of cutting costs, too, including reducing the cost and waste of supplies, Baron said.
At a March 24 news conference, Baron described the atmosphere at both hospitals as “very somber and in some areas angry.
“It’s a very difficult day for all of us,” he said.
The jobs to be eliminated are between 60 and 70 positions on two nursing units at Rhode Island Hospital and one at Miriam, about eight social workers (or about 25 percent of that department) and a host of other jobs ranging from management to housekeeping, Baron said. The nursing units are expected to close in late April and early May. Baron said such closings have occurred in the past and are not unusual.
Should the need for beds increase by fall or earlier, the hospitals will “build back up again” using per diem workers and paying overtime. As a last resort, it would recall employees who have been laid off, Baron said.
“It’s not so easy to flex up and down in this fiscal environment,” he said.
Baron insisted that patients will see no difference in quality of care, as layoffs “started as far away as we could from the patients.”
“At the bedside, we’re not changing the way we provide patient care,” he said.
Meanwhile, Lifespan is counting on a proposed merger with Rhode Island Care New England network to avoid future financial crises. Lifespan and Care New England two weeks ago filed applications with state officials who will review the deal.
Attorney General Sheldon Whitehouse and Health Director Patricia Nolan are required by law to scrutinize details of the deal, then approve or reject it. If approved, the new hospital network would control about half of the state’s health care facilities. Officials from both hospital groups have said the merger could save up to $80 million by eliminating duplicate services.
Care New England members are Women & Infants, Butler and Kent hospitals.
