Up to 100 jobs will be cut from Dartmouth-Hitchcock Health's payroll by next January in order to close a $100 million budget deficit at Dartmouth-Hitchcock Medical Center, DHMC Director of Media Relations Rick Adams said in an interview with The Dartmouth. Cost-cutting initiatives enacted this fall, such as early retirement plans for eligible hospital employees, were not enough to balance the budget, according to Adams.
"Before we even start the budget [for fiscal year 2012], we're looking at a $100 million deficit," he said. "We're in a similar situation as other hospitals around the state."
The announcement that 100 additional jobs needed to be eliminated was made at a town hall-style meeting on Friday, Adams said. James Weinstein, the newly appointed chief executive officer and president of Dartmouth-Hitchcock Health, a health care conglomerate system that organizes multiple hospitals and clinics in New Hampshire, spoke to approximately 175 staff members. Dartmouth-Hitchcock Health employs pproximately 8,700 people, according to its website.
Employees at the meeting mostly asked questions about the logistics surrounding the layoffs, but Adams said there had been no final decisions about which employees would be let go.
"We have said all along that a reduction in force would be our last step," he said. "We don't have exact numbers or exact timing, but we are focused on how to have the least impact on our employees."
DHMC's discretionary spending budget, which covers physicians' travel and conference costs, as well as costs associated with any non-clinical activity, has been cut to increase efficiency, according to Adams. DHMC has also "sought to eliminate 300 positions through unfilled vacancies and attrition," Adams said. Through DHMC's attrition practices, positions of staff members who left their jobs voluntarily are reviewed and left unfilled if determined to be uncritical, according to Adams.
Two major expenses the overall cost of Medicaid care and a new Medicaid tax enacted on July 1 accounted for the budget deficit, Adams said. DHMC provided $88 million in care to Medicaid patients in fiscal year 2010, but was only reimbursed $28 million, according to Adams. The reimbursements are provided by the state under the Disproportionate Share Hospitals program, which collects tax money and sends it to hospitals to "offset the costs of Medicare and charity care," Adams said.
The New Hampshire state legislature passed a budget that included a Medicaid enhancement tax in July mandating that hospitals are charged 5.5 percent of net patient revenue, which totals $40 million at DHMC, according to Adams.
DHMC and nine other hospitals filed legal suit against New Hampshire in July 2011 to reverse the budget that increases the Medicaid tax, according to Adams.
"We've been working since last year to close the deficit," he said. "We know that we've got to lower our costs. Our main points are better outcomes, quality care and lower costs."
DHMC offered voluntary early retirement to 735 of its eligible employees approximately two months ago. Although 291 employees accepted the offer, these cuts were not sufficient to close the budget deficits, Adams said.
In September 2010, DHMC announced that employees will pay for a higher percentage their health care premiums. Vice presidents and chief officers at DHMC have not received pay raises, although employees in lower-level positions were still eligible for merit-based raises of up to 2 percent of their current income, Adams said.
"Everything is on the table," he said. "The size and composition of our workforce, the services we offer, our entire operation. We are changing our business practices and workflows to be more efficient."
Positions directly related to patient care, such as physicians and bedside nurses, were not eligible for the early retirement offers, according to Adams. It has not been determined whether those positions will be eligible for the recently announced layoffs, he said.
"As we look at the reduction in force, there hasn't been any specifically targeted group nor has there been any group that has been exempted," Adams said. "At the end, it all points back to patient care."
