Looking to cut $120M in its budget, Dartmouth Health plans hiring freeze, job reviews
|Published: 01-21-2023 11:19 PM
LEBANON — Dartmouth Health, New Hampshire’s largest private employer, has implemented performance improvement plans and a “position review process” at some of its member organizations as it seeks to close a $120 million budget gap by the end of September, according to an email sent to employees.
After an initial hiring freeze, DH officials have determined that all open positions at Dartmouth Hitchcock Medical Center and the Dartmouth Hitchcock Clinics are subject to a hiring review by the Position Control Review and Clinical Workforce Committees, according to the Jan. 17 email obtained by the Valley News. This review also will be required of job changes such as employee transfers, adjustments, promotions and filling positions after an employee leaves “for the foreseeable future.”
The Lebanon-based health system will continue to actively recruit for some key “Tier 1” positions that “are essential to keeping patients safe and providing high-quality care.” Such positions include those that would allow DH to replace those currently filled by a staffing agency; positions that are currently understaffed and have a direct impact on clinical care; research positions that have a full two years of grant funding available; and positions required to meet regulatory requirements, according to the Tuesday message.
Audra Burns, a DH spokeswoman, confirmed by email on Friday that DHMC and the DH clinics have implemented a performance improvement plan “to address our operating and financial challenges in this highly complex national health care environment.”
Separate performance improvement plans are also in place for two other DH members: the Visiting Nurse and Hospice for Vermont and New Hampshire and Cheshire Medical Center in Keene, N.H.
The system also includes Alice Peck Day Memorial Hospital in Lebanon, Mt. Ascutney Hospital and Health Center in Windsor and New London Hospital.
“MAHHC does not have a hiring freeze and continues to actively recruit in many departments,” Dr. Joseph Perras, CEO of Mt. Ascutney, said in a Friday email. “We will continue our long-standing practice of reviewing every open position on a regular basis to determine if that position is still needed, and any new or non-budgeted position is always put under the microscope.”
Burns said the ongoing workforce shortage is a “primary contributor” to the health system’s financial challenges. In total, the system employs about 12,000 people. DHMC and the DH clinics had about 800 job openings listed online on Friday. Cheshire Medical Center had about 150 openings, while each of the three smaller hospitals had close to 100. The majority of the openings are for nursing or allied health positions.
DH’s most recent financial results, filed with bondholders in November, show that it ended the first quarter of this fiscal year on Sept. 30 with a $41.4 million loss, or nearly 6%, on a nearly $770 million operating budget. That loss included $1.8 million in federal stimulus funds, but the health system wasn’t expecting any more federal stimulus money this fiscal year.
DH relied on $98.8 million in federal stimulus funds to achieve a near break-even result in the fiscal year that ended June 30, when it had a $22.1 million loss, less than 1%, on a $2.9 billion operating budget.
The loss reported in November was largely due to staffing challenges, including a nation-wide shortage of nurses, which has driven up the cost of temporary nurses. DH also is challenged by an inability to discharge patients to other settings in a timely manner due to a lack of beds and staff across the region. Meanwhile, COVID-19 has continued to drive supply chain issues such as product shortages and the cost of medications has risen.
As a result, DH CFO Dan Jantzen told bondholders in November that DH was “curtailing capital spending as much as possible to improve liquidity.”
He also said at the time that DH and its members “continue to explore all options to improve our financial performance.”
Fitch Ratings supported the idea that DH can navigate its current challenges when in December it affirmed the “A” rating on DH’s bonds, calling it “stable.” The rating reflects the role DH plays “as the leading acute care provider in a broad, multi-state and demographically stable market,” according to Fitch’s Dec. 14 statement.
The ratings agency said it believes DH’s “strong market position” and “high acuity patient mix” will allow it to “maintain a solid financial profile” in the future.
In this week’s missive, DH officials said the organization’s performance improvement plan task force is focused on three main areas: revenue enhancement, margin improvement and expense reduction.
On the revenue front, DH aims to increase its ability to meet demand for outpatient services at DHMC and its clinics in southern New Hampshire; improve coding and documentation to ensure it captures “appropriate reimbursement” for services; and improving the rates it’s paid by commercial insurers in part by opening up negotiations on multi-year contracts ahead of schedule.
To address margin improvement, DH seeks to grow services where new expenses are covered by increases in revenue, including expansion in pharmacy services.
To cut costs, DH is looking to reduce the cost of supplies; find more efficient ways to manage its workforce; and is welcoming employees’ suggestions for further ideas.
Meanwhile, DHMC is slated to open its new $150 million patient pavilion this spring. The pavilion, for which funding was secured prior to the COVID-19 pandemic, will open 64 new beds in early May, but at the same time DHMC will close one 36-bed patient care unit for renovations, according to the employee email this week. Therefore, it will just need to staff an additional 28 beds to start. DH is currently working to ensure that staff are hired and ready to care for people in the new beds.
“We’re experiencing larger patient volumes than ever before,” the email said. “We need to meet the increased demand by providing high-quality care in the most medically-appropriate setting, which is often the academic medical center.”
In addition, DH is expecting to benefit from the related increases in revenue.
“Expanded access will position us for the future and positively impact our financial performance,” the email said.
Nora Doyle-Burr can be reached at email@example.com or 603-727-3213.