D-H Lays Off 84 Workers To Cut Costs

Valley News Staff Writer
Tuesday, October 18, 2016

Lebanon — Dartmouth-Hitchcock will lay off 84 employees as part of its efforts to restore its financial health after the recent discovery of a $23 million quarterly operating deficit, the health care provider announced on Monday.

The layoffs are part of what Chief Executive James Weinstein described as “a performance improvement process, mostly related to reducing our overall expenses,” after a 12-month period in which D-H posted a $12 million loss and a negative 0.8 percent operating margin.

Last month, Weinstein said D-H would seek $100 million from cost cuts or revenue additions.

And that could require D-H to lay off as many as 460 of the 9,200 employees from its flagship Mary Hitchcock Memorial Hospital and other clinics around New Hampshire, he warned at the time.

But in a memorandum sent out on Monday morning to D-H employees, Weinstein said managers had concluded they would be “able to largely achieve our goal” by attrition, delaying some new hires and reducing the number of open and unfilled positions.

Rick Adams, a D-H spokesman, declined to say what types of jobs were held by the employees facing layoffs, when the layoffs would occur or how much the health system expected to save from the layoffs. “We’re not going to elaborate beyond what’s in (Weinstein’s) memo,” he said on Monday afternoon.

The emailed announcement was a source of relief inside the walls of D-H, one employee said after work on Monday.

“Everybody was afraid that they were going to get laid off,” the employee said.

Weinstein’s memo asserted that D-H’s “commitment to our patients and families has never been greater, despite living in very challenging times of diminishing reimbursements and ever-rising costs.”

The September announcement of the financial plan also included a pledge to review the finances and effectiveness of clinical programs throughout the D-H network. Among the measures under consideration were a review of the productivity of some primary care doctors in the Upper Valley and a requirement that each see at least 2.2 patients per hour.

Other proposed “financial improvement” steps included cuts in human resources, finance and other support areas; shorter orientation times for new nurses; an expanded role for medical assistants and an estimated $8 million reduction of supply costs. The health system also proposed to add about $5 million in revenue by redirecting patients who need specialty care to D-H doctors rather than outsiders.

Weinstein’s memo did not spell out which of those measures are included in the current plan. It did include a general promise to “align resources, reduce unnecessary redundancies, and empower our teams to advance their goals, always with patient safety and high quality as our primary focus.”

In previous statements, Weinstein had traced D-H’s recent financial woes back to problems with a May 2015 outsourcing deal that farmed out billing and revenue management to a subsidiary of Tenet Healthcare, a multibillion-dollar hospital chain. Rising costs of supplies and drugs and high pay for temporary nurses also contributed to the deficit, he said.

The employees facing layoffs will be offered job placement services “and a number of resources” over the next 60 days, Weinstein said. In addition, he said, there have been “preliminary conversations with Dartmouth College to give preferential consideration” for openings there to the laid off D-H employees.

Those conversations were underway a mere six months after D-H offered jobs to 285 employees of Dartmouth’s Geisel School of Medicine, including physicians, researchers and staff in the psychiatry department, and clinical researchers and staff. Those jobs were moved to D-H as part of a restructuring plan aimed at erasing a $30 million deficit at Geisel.

Adams, the spokesman, declined to say whether any of those newly hired former Dartmouth employees would be affected by the upcoming layoffs.

Rick Jurgens can be reached at rjurgens@vnews.com or 603-727-3229.