FALL RIVER — Southcoast Health System Inc. reported that 189 employees have accepted voluntary early buyouts offered over the summer as the medical group struggles with rising costs and falling reimbursement rates resulting in an operating loss of $29 million for the first three quarters of the fiscal year.
The final day to accept the buyouts was Monday, Oct. 23.
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“The reasons for this loss include reduced Medicare reimbursement, additional bad debt and charity, shift from inpatient to outpatient, staffing increase of 200 full time employees since 2016, and decreased surgical volume. However, Southcoast Health remains very strong financially with $588 million in cash and investments, $717 million in equity and 28 percent debt to equity,” said Southcoast Health Public Information Officer, Peter Cohenno.
In an Aug. 31 letter to employees, Keith A. Hovan, President and CEO of Southcoast, said the company had addressed the loss through driving targeted growth, utilizing resources responsibly, maximizing patient access to Southcoast physicians and services, and evaluating services and programs.
“We are beginning to see improvements because of those imperatives, but it has become obvious that we also must reduce payroll costs,” Hovan wrote.
The buyout plan is being offered to employees across the Southcoast Health, who are regular status employees with 20 years of continuous service as of Dec. 31, 2017 and at least 62 years old as of Dec. 31, 2017. Physicians, vice presidents, senior vice presidents, executive vice presidents, and the president are not eligible for the buyout.
Other initiatives to reduce labor costs may be necessary in the future, Hovan wrote in the letter.
In 2016, the company reported a loss of $8.8 million, according to the Mass. Center for Health Information and Analysis.
Southcoast Health’s system includes four hospitals in Dartmouth, Fall River, New Bedford and Wareham, Mass.
Rob Borkowski is a PBN staff writer. Email him at Borkowski@PBN.com.
