Correction Appended
Officials at Dartmouth-Hitchcock Medical Center plan to cut 300 full-time positions over the next 12 months, according to Rick Adams, DHMC media relations manager. This decision comes as the hospital attempts to address an estimated $50-million budget shortfall for the upcoming year, which resulted from a decrease in Medicaid reimbursements in 2009, according to a Sept. 13 DHMC press release.
The hospital will first look to employee attrition and job consolidation to create vacant positions that could be eliminated. The hospital's trustees will rely on layoffs as a last resort, according to the press release. There are currently 200 vacant positions that will be evaluated, and over the next year, an expected 500 vacancies from attrition will be considered for elimination, according to Adams.
Adams explained that DHMC's profit margin usually has a significant surplus, which is used to fund initiatives and new projects. The decrease in Medicare reimbursements from New Hampshire and Vermont combined with other sources of revenue loss such as an overall decrease in the number of patients at DHMC has resulted in a much smaller profit, Adams said.
"Economists say that the recession declined last fall, but we are still seeing lingering effects from the economy," Adams said. "The decline in our revenue caused us to revise our margin estimates for the coming year."
The DHMC board has approved several "cost-cutting efforts" that will address current budget deficits for the upcoming fiscal year, Adams said.
Hospital officials announced their plans to implement a 2-percent performance-based salary increase effective on Jan. 1, 2011 for all employees except for presidents, officers, vice presidents, department chairs and center directors, DHMC co-presidents Nancy Formella and James Weinstein wrote in a Sept. 14 e-mail to all DHMC employees.
Formella and Weinstein also announced that employees will pay more for their health insurance because DHMC will now contribute less toward employees' health insurance premiums. Employees that contributed 10 percent last year will now have to contribute 20 percent of the cost of premiums, with DHMC covering only 80 percent, rather than the previous 90 percent, Adams said. The increase in the cost of premiums is "tiered," so that lower wage earners will experience a smaller increase in cost, he said.
Employees hired after Jan. 1, 2011 will receive less paid time off, according to the e-mail. However, there will be no reductions in "earned time" time that can be taken off during the year for current employees, according to Adams.
Hospital officials are continuing to look for new sources of revenue for the hospital, Adams said. One such initiative is to continue the "eD-H" program which will convert all paper files to digital files. By completing this process three years before the national deadline set by President Barack Obama under the Affordable Health Care for America Act, DHMC will receive significant financial rewards, according to Adams.
DHMC officials also plan to continue the hospital's strategic partnerships with other health care providers in the region to make the hospital's spending more efficient, the press release said.
"It is clear that these kinds of collaborations can benefit the population," Adams said. "When we talk about the transformation of health care in the region, working with other hospitals and facilities makes a lot of sense in terms of efficiency."
Medical centers across the country are experiencing similar problems with budget deficits, Adams said.
"We are looking at other health care systems and the steps that they are taking," he said. "You see layoffs and major cost-cutting efforts taking place. We think we have a plan that will address the problems that we have for fiscal year [2011] that involves redesigning our work."
Additionally, DHMC will continue to "aggressively" identify cost-savings in non-personnel expenses such as supply management, travel and purchased services, according to the press release.
