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Friday, August 12, 2011

Hospital offers retirement to 725 employees

Lebanon – Dartmouth-Hitchcock is offering early retirement to 725 workers as part of an effort to bring the institution’s budget in line with state Medicaid policy.

Depending on how many employees accept the offer, Dartmouth-Hitchcock could save from $5 million to $25 million, said Alan Weston, chief human resource officer for the Lebanon hospital and its clinics in Concord, Manchester, Nashua and Keene.

That’s only a fraction of the roughly $100 million hole in Dartmouth-Hitchcock’s 2012 budget caused by changes in Medicaid reimbursement enacted by state lawmakers. The early retirement offer doesn’t preclude the possibility of layoffs or other cost-cutting measures.

“We’re facing a substantial shortfall and everything is on the table,” Weston said Wednesday.

A little more than 8 percent of Dartmouth-Hitchcock’s work force of 8,700 will receive the early retirement offer. About 6,650 of the company’s workers are in Lebanon.

Early retirement will be offered only to employees in “non-clinical” positions that won’t affect patient care, Weston said. The offer is targeted at employees whose age and years of service at the hospital add up to 80 – for example, a 55-year-old employee with 25 years of service.

“I’m not eligible,” said Elaine McCarthy, a nurse in Lebanon. “I work with direct patient care.” Word had percolated about a possible early retirement option, and some who found they wouldn’t be eligible were disappointed, McCarthy said. “Too bad they couldn’t offer it to everybody,” she said.

Other employees said they were pleased with the early retirement idea, even if it didn’t apply to them.

“I think it’s a great idea to allow people who want to end their career in a nice manner,” said Jean Wulpern, a nurse at Dartmouth-Hitchcock Medical Center for nearly 19 years. “It’s a great way to downsize staffing,” she said, adding that it’s something that has to be done because of budget constraints.

“I think it’s a positive thing,” said Kurt Gotthardt, who works in the hospital’s transportation staff. Staffing needs to be reduced, he said, and early retirement is the best way.

“The other option is layoffs, which doesn’t make anybody happy,” said Gotthardt, who isn’t eligible for the retirement deal.

The retirements are likely to be proportional through the Dartmouth-Hitchcock system, Weston said, so the vast majority will be in Lebanon. The offers will go to a pool of people that doesn’t include doctors, nurses and most other medical staff. That means the early retirees would likely be adminstrators, administrative support or service workers. Dartmouth-Hitchcock is the most recent of a handful of New Hampshire hospitals to announce a decrease in staffing.

Late last month, Manchester-based Elliot Health Systems laid off 182 employees and Southern New Hampshire Medical Center in Nashua announced 100 layoffs. Last week, St. Joseph Hospital, also in Nashua, announced plans to close two subsidiaries, Rockingham Regional Ambulance Inc. and Granite State Mediquip Inc., that have a combined 174 employees. Dartmouth-Hitchcock was one of 10 of New Hampshire’s largest hospitals to sue the state last month, contending that lower Medicaid funding would lead to major reductions in services or programs.

The state budget approved in June saddles Dartmouth-Hitchcock with a $47 million Medicaid enhancement tax bill and an estimated $48 million in uncompensated care to Medicaid patients. That’s a sizable chunk, about 8 percent, of Dartmouth’s roughly $1.2 billion budget.

House Speaker William O’Brien, one of the architects of the state budget, said the employment reductions are a product of the state spending only what it can afford.

“We all have to share in drawing back to the revenue we’re receiving from the overspending that took place over the past four years,” O’Brien, a Mont Vernon Republican, said in a phone interview Wednesday. “This is what living in your means amounts to.”

State Rep. Susan Almy, D-Lebanon, said O’Brien is pretending the state doesn’t have the means to pay for its obligations.

“New Hampshire is one of the wealthiest states in the country and the choice was not to raise revenues,” Almy said Wednesday.

The hospital layoffs around the state aren’t a good sign for the economy, said Russ Thibeault, of Applied Economic Research in Laconia. And there are more to come.

“I think whenever you lose jobs it’s a negative event,” Thibeault said. The health industry had been a source of jobs that offered good pay and benefits, he said, but continued cuts to such programs as Medicare, Medicaid and Social Security are going to erode some of the economy’s tentative job gains.

“I think it’s kind of the tip of the iceberg of entitlement adjustments that we’re hearing about in the news,” Thibeault said.

The response to those adjustments is already being felt in the Upper Valley. Earlier this summer, Dartmouth-Hitchcock closed a pediatric clinic in Canaan to save money. And Wednesday’s announcement follows an effort during the hospital’s current fiscal year, which ends Sept. 30, to shed 300 jobs through attrition, system-wide, and reduce employee benefits to help close a $50 million budget gap. Weston said that effort, called a “redesign” of the nonprofit company’s work force, was on track to meet its target by the end of September.

Those job reductions were also a response to Medicaid losses, which totaled $87 million.

The early retirement offer follows announcements in recent months of layoffs at Thermal Dynamics and Timken Aerospace, two other Lebanon companies, as well as the closure of Borders, the West Lebanon chain bookstore.

Lebanon is slated to lose its full-time Department of Employment and Security office on Sept. 2. If a substantial number of people accept the retirement offer, but decide to get back into the job market, that office could be overwhelmed.

Weston, the Dartmouth-Hitchcock human resource officer, didn’t specify an age limit for the retirement offer, but employees who spoke to the Valley News said it’s only for employees age 55 and up. Employees in their 50s could retire early and search for another job.

Even before Wednesday’s announcement, Almy said she was concerned that the state’s plan to have a DES staffer in Lebanon once a week wouldn’t be sufficient.

DES Commissioner Tara Reardon said that most people access her department’s resources through the Internet and that the state could assign two people to Lebanon every Tuesday if there’s sufficient demand.

“I’m pretty sure that two people once a week … isn’t going to be enough,” Almy said.

Employees receiving the offer will get the paperwork by Monday, then will have until Sept. 30 to respond. The retirements will take effect in October.