NASHUA – Making an eight-figure cut to a budget, even a big budget, doesn’t happen overnight.

Officials at Southern New Hampshire Medical Center and St. Joseph Hospital have had their hands full in recent weeks trying to figure out how to trim their budgets by about $10 million apiece while hurting patient care as little as possible.

The painful accounting surgery follows the passage of a state budget that included cuts to hospital funding. Even though there was some warning, the hospitals still haven’t made final decisions.

“Right now, we’re still finalizing decisions to be made,” said Melissa Sears, St. Joseph’s vice president of strategy and business development. “Nothing is off the table.”

She said St. Joseph has to find about $9.6 million to trim from its budget this year and will likely need to lay off employees.

SNHMC and St. Joseph are two of 10 hospitals suing the state, alleging New Hampshire’s budget plan uses more than $200 million in Medicaid funds that should go to hospitals.

SNHMC began laying off about 6 percent of its workforce – 100 people – about two weeks ago. It will also shut down its 30-bed behavioral health unit, but final decisions on the last third of the layoffs haven’t been made, officials said.

On Monday, St. Joseph announced it would close the state’s largest 911 responder, Rockingham Ambulance, and Granite State Mediquip, a medical equipment provider, costing 174 employees their jobs.

The hospital will make more cuts in coming weeks, according to David Ross, St. Joseph’s CEO.

Leaders at both hospitals said the tough decisions have been developed over weeks of meetings at all levels of management, first with managers working with directors, then directors with vice presidents and on up the line. Both hospitals have also been working to keep employees informed and calm, officials said, by hosting regular town-hall-style meetings.

Those meetings have become popular destinations at St. Joseph. Instead of the 30-40 employees who used to attend the quarterly meetings, the town halls have been standing-room-only, with more than 100 employees joining in, Sears said.

“It’s a sizeable impact on the organization,” she said. “It’s very likely that employees will be impacted in some manner.”

SNHMC and St. Joseph said they need the cuts to pay what health care leaders say is a new 5.5 percent bed tax to the state. Since 1991, the state has used the payments to get a matching payment from the federal government. The state ended those reimbursements, called disproportionate share program funding, as part of the two-year budget that went into effect on July 1.

Scott Westover, vice president for strategic marketing at SNHMC, said participating in the legislative budgeting process helped because the hospital knew massive cuts were possible. So, the hospital developed what it calls its “blueprint for stability.”

“Months ago, we were able to say, ‘OK, what would the impact be?’?” Westover said. “We didn’t think it was probable when we started. We became aware that we needed to be ready.”

Tom Wilhelmsen, the hospital’s president and CEO, said the plan was developed to identify ways to cut about $10.6 million from the hospital’s budget, but also to look at other ways to meet a demand that isn’t going away, including combining services, reorganizing management and closing some programs that cost too much.

“We want our employees to know we have thought this through very well,” Wilhelmsen said.

Last week, the hospitals filed a federal lawsuit against Nicholas Toumpas, commissioner of the state Department of Health and Human Services, claiming the state’s two-year budget improperly uses more than $200 million in Mediciad funds for non-Medicaid purposes.

The suit, filed at the U.S. District Court in Concord, alleges the plan violates federal law and threatens “immediate and irreparable injury to the public.” It asks that the plan be halted immediately.

Joseph G. Cote can be reached at 594-6415 or jcote@nashuatelegraph.com. Also, check Cote out on Twitter (@Telegraph_JCote).