Vermont medical center to cut workforce through redesign, attrition

Northwestern Medical Center in St. Albans, Vt., plans to cut staff as it works to improve its financial picture, according to VTDigger.

The hospital — which saw a negative operating margin of 3.4 percent and an operational loss of $3.7 million in fiscal year 2018 — plans to eliminate 27.5 full-time-equivalent positions.

“We’re committed to doing that, really, through redesign and through attrition, and not by doing layoffs at Northwestern,” finance director Stephanie Breault told the Green Mountain Care Board, according to the VTDigger report.

The cuts are part of the hospital’s operational improvement plan, she said.

Ms. Breault said that by following the plan, Northwestern is expected to see a profit in fiscal year 2019.

Eight Vermont hospitals saw negative operating margins in fiscal year 2018 as expense growth outpaced revenue growth, according to operating results outlined by the state’s Green Mountain Care Board, which is responsible for reducing the rate of healthcare cost growth.

Amid these results, a care board hospital budget hearing April 8 focused on Northwestern’s financial situation.

Ms. Breault reportedly told the care board that Northwestern’s lower-than-expected revenues in fiscal 2018 were largely because of “a continued shift from the inpatient setting to the outpatient setting.”

She also cited lower admissions and emergency department visits as contributing factors.

As far as expenses, she said the hospital went over budget last fiscal year with salaries and benefits.

“We’re in good company when we talk about wage pressure and the challenges we have there,” she said. “We’re trying to strike that balance between having an operating margin and having a sustainable business but at the same time retain and recruit [staff].”

To help Northwestern strike that balance, the $2.8 million operational improvement plan reportedly includes $645,000 in contractual savings and $204,000 more in reductions from eliminating waste or inefficiencies.

Ms. Breault said that the planned workforce reduction could end up being higher or lower than 27.5 full-time-equivalent positions since the hospital is still assessing its finances.


More articles on healthcare finance: 

RCM tip of the day: Talk to patients about billing before service
Colorado’s plan to reduce healthcare costs
Philadelphia hospital’s parent company sees ‘pathway to stability’


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