Officials weigh impact of hospital layoffs on economy

Announced a day after the opening of a new cancer center, Hartford HealthCare’s plan to lay off nearly 420 employees — including at least 64 in New Britain — has some people bracing for economic pain, but others are skeptical.

State Sen. Terry Gerratana, D-New Britain, said reacting to the announcement would be premature, since the state legislature is scheduled to hold a special session June 29 and 30 to implement and possibly adjust the biennial budget passed June 3. The session will include a series of “implementer bills,” containing policy changes required to activate the budget.

Hartford HealthCare officials said the job cuts are necessary because of reduced state and federal Medicaid reimbursements and higher taxes in the state budget.

Gerratana acknowledged that HHC’s release of job cut projections could be viewed as a pressure tactic.

“They’re making assumptions when we haven’t finalized the implementer language yet,” she said. “There certainly could be adjustments.”

In addition, “Hospitals aren’t the only entities asking for changes,” Gerratana said.

Nonetheless, the language coming from hospital officials was dire Wednesday. “Despite our best efforts to reduce costs and increase revenues this year, Hartford HealthCare faces additional Medicaid cuts, bringing our total Medicaid payment reductions from the state of Connecticut to more than $100 million over five years,” said Jeffrey A. Flaks, HHC executive vice president in a statement. “The magnitude of these cuts makes our model unsustainable going forward.”

Rebecca Stewart, HHC director of media relations, said the network will not disclose which specific jobs are on the chopping block, or how many would come from HHC-owned Hospital of Central Connecticut’s New Britain General Campus, the Bradley Memorial Campus in Southington or the new Hartford HealthCare Cancer Institute at the HOCC, which held its official grand opening Tuesday. HOCC has a staff of about 2,800 employees.

Flaks and HHC President Elliot Joseph told employees in a company-wide email that job reductions will happen at all five HHC hospitals and at every level of the organization, from administration and managerial to front-line positions. They promised to be “thoughtful, compassionate and fair” in determining which jobs would be eliminated and to “work to ensure that the period of uncertainty for staff will be as short as possible.”

Michele Sharp, director of communications for the Connecticut Hospital Association, said hospitals have an economic impact that goes far beyond their staffing and revenue levels. “Every job in a Connecticut hospital generates a job outside the hospital, and all of these dollars have a cascading effect,” she said.

She estimated HOCC’s total economic impact to be more than three quarters of a billion dollars in 2013.

In an effort to cut costs, HHC said it will spend about $40 million less on products and services in the next fiscal year.

“This is significant. Hartford HealthCare is a true economic engine for our regions and our entire state,” Flaks said in the statement. “Contending with these additional cutbacks has led us to some of the most difficult and painful decisions we have to make.”

Devon Puglia, director of media relations for Gov. Dannel P. Malloy, said hospitals must adapt to the current economic climate.

“This is a challenging budget year where difficult, often unpopular choices were absolutely necessary,” he said, encouraging hospitals to cut costs as the state has done. “With that said, last year, the hospital industry did have one of its most profitable and lucrative years.”

Sharp acknowledged hospitals are hoping legislators will find ways to lessen an anticipated financial blow.

“The health of the citizens of Connecticut is the number one priority of our hospitals and their caregivers. We hope legislators make it a priority during the special session, too. We need them to restore the funding cuts and reduce taxes on hospital care,” she said.

State Rep. Peter Tercyak, D-New Britain, said funding cuts worry him, but they could be partially offset by penalizing large employers who pay workers less than $15 per hour. He is supporting legislation to do that.

“I have serious concerns that our Medicaid reimbursement rates are not sufficient,”  said. “This is just one ugly business.”

[“source – centralctcommunications.com”]