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Dartmouth-Hitchcock Braces for Funding Cuts

Lebanon — The federal spending cuts known as sequestration are forcing Dartmouth-Hitchcock to make adjustments as it prepares to lose millions in revenue this year.

The region’s largest health care provider has slowed hiring and is taking a close look at which positions are absolutely necessary in meeting its organizational mission, said Gregg Meyer, executive vice president for population health and chief clinical officer at Dartmouth-Hitchcock. The concerns about funding cuts extend to Dartmouth College as research grants may also take a hit from sequestration.

No jobs are being eliminated at Dartmouth-Hitchcock, Meyer said. However, hospital officials are being careful about hiring decisions to make sure that new staffers don’t end up losing their jobs in a matter of months.

“What we are doing is looking very carefully at all physicians here at Dartmouth-Hitchcock, all new positions and replacement positions, as well, and asking are these clinically or operationally mission-critical for us. If they are, we still need those folks to work here,” Meyer said. “But we also recognize that we need to avoid what I think would be a very unfair ... to hire people in March or April or May knowing that we’re going to have some belt-tightening to do later on in the summer or fall that could potentially lead to them losing their job.”

In an email to employees Monday, Dartmouth-Hitchcock CEO Jim Weinstein said the organization is preparing for a $1.6 million impact on its budget this fiscal year, which ends in June. For all of 2013, Dartmouth-Hitchcock is expecting at least $6.2 million in losses.

The potential losses are a fraction of Dartmouth-Hitchcock’s $1.3 billion annual budget. However, they come at a time when the hospital is already struggling with cuts in its Medicaid funding.

There are still lots of questions that remain about the impact from sequestration, which began March 1. But Dartmouth-Hitchcock officials are certain that there will be some funding losses in the very near future, Meyer said.

A 2 percent cut in Medicare funding as a result of the sequestration will go into effect April 1. But there are other areas where Dartmouth-Hitchcock stands to take a hit.

The Dartmouth-Hitchcock system includes the Geisel School of Medicine at Dartmouth, which could lose some research funding from sequestration.

“There are a number of downstream consequences which we are equally concerned about, like the impact on the federal research budget, which clearly impacts the Geisel School of Medicine and Dartmouth-Hitchcock Medical Center,” Meyer said. “Those (impacts) are less clear right now.”

The Medicare cuts will happen over the next nine years, and are expected to grow from $10.7 billion this year to $16.4 billion in 2021, according to an analysis by the Congressional Budget Office. An American Hospital Association report estimated that nearly 500,000 jobs will be lost nationally in health care during the first year of the sequester. Hospitals throughout the nation have been preparing in different ways, said Marie Watteau, an AHA spokeswoman.

“Small and rural hospitals are especially vulnerable because they have fewer resources,” Watteau said in an email to the Valley News. “These cuts come on top of cuts hospitals are already facing. All hospitals will have to look at all of their services and evaluate their ability to continue to meet the needs for their patients and communities.”

There remains a great deal of uncertainty around how Dartmouth-Hitchcock and other health care providers will be affected, Meyer said. Employees will receive regular updates as the picture becomes clearer, he said.

Dartmouth-Hitchcock has reached out to the region’s congressional delegates and has also been working through national health care organizations to make its concerns known.

Even without the budget cuts, however, hospitals still need to look at controlling costs and reining in the growth in health care spending, Meyer said.

“The reality in health care is trying to do more with less and create a sustainable system,” Meyer said. “As we do that, we need to be very prudent about our expense base, but the sequester kind of puts that into higher relief. It brings it into greater focus and forces us to move forward.”

Dartmouth College is also bracing for revenue losses.

On Tuesday, interim provost Martin Wybourne sent an email to faculty encouraging them to prepare for potential cuts. Wybourne was uncertain, however, of how deep those cuts would be or who would be affected.

“As we begin to learn how federal funding agencies will implement the cuts, Dartmouth’s goal is to maintain research programs and staffing levels to the greatest extent possible,” Wybourne wrote. “In consultation with (Interim) President Folt and the Deans, we have developed a plan to address potential reductions to research funding. As a first step, if it becomes necessary, I encourage faculty to re-budget to protect grant-funded students and staff.”

Chris Fleisher can be reached at 603-727-3229 or cfleisher@vnews.com.