From layoffs to bonuses: How one system turned around in a year

In three years, a Massachusetts health system went from having millions in operating losses to spending $1.2 million on one-time bonuses to employees, according to the Boston Business Journal.


In 2013, New Bedford, Mass.-based Southcoast Health System — which includes three hospitals and a few physician and nursing groups — reported $8 million in operating losses. The system suffered $30 million in operating losses in 2014.

As fiscal year 2015 began, Southcoast laid off 100 employees. A series of changes occurred — such as the system shifting from mainly inpatient to mainly outpatient care — and by June 30, Southcoast reported only a $1.9 million operating loss.

For the fiscal year ending Sept. 30, Southcoast is predicting a near $5 million operating profit. Keith Hovan, president and CEO of Southcoast, accredits the change to revenue growth of 11 percent and the benefits from shifting from inpatient to outpatient care.

After the extreme improvements, Southcoast decided to do something to thank its employees. On Nov. 12, Southcoast will give $1.2 million to over 6,000 employees, excluding senior leaders, directors and managers. These higher positions will receive bonuses, but the system's board is still determining the amount. Other employees will receive amounts which differ according to their status.

"It's not an insignificant amount," said Mr. Hovan. "The senior leadership and the board wanted to recognize the employees at Southcoast for their level of participation in what was a turnaround year for us."

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