Raises on pause for Baystate executives, employees

Springfield, Mass.-based Baystate Health is delaying annual pay increases typically effective in April each year for qualifying workers, citing financial challenges.

Baystate President and CEO Mark Keroack, MD, told Western Mass News the paused raises will not apply to union-represented workers because their salaries are agreed upon in negotiations on a three-year basis, but they do apply to his leadership and executive teams. Baystate has about 13,000 employees total.

"The pause in this raise is something we really did not want to do. It was something of great reluctance, but it's what we've had to do to try and get our finances back in line," Dr. Keroack told the publication.

A statement shared with Becker's from the health system says Baystate continues to face financial challenges such as growing operational expenses that continue to outpace revenues, payment rates from insurers that do not cover care costs, and workforce shortages. Baystate lost approximately $177 million in 2022, $63 million in 2023, and $10 million so far this year, according to Dr. Keroack. The health system is currently trending toward an annual operating loss of more than $40 million. 

"Our ability to return to breakeven performance is critical to our financial stability and delivering on our mission," the health system statement reads, adding that the decision to delay annual pay increases stems from this need.

The health system plans to reevaluate its budget performance later this spring, with hopes of being able to implement pay increases in July.

"This decision was not made lightly, and we are proud of our employees' dedication to our patients and communities," Baystate said. "We are committed to supporting their success."

Dr. Keroack told Western Mass News Baystate is also working on length of stay, schedule optimization, and with its vendors to improve the health system's financial picture. 

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