Layoffs hit Care New England hospital group

PROVIDENCE, R.I. (WPRI) – Care New England, Rhode Island’s No. 2 hospital group, confirmed Wednesday it has cut more jobs across its system this week in the company’s latest effort to stabilize its finances.

Jim Beardsworth, a spokesman for Care New England, said the “vast majority” of the layoffs occurred at Women & Infants Hospital, the group’s flagship, but acknowledged there was also “some impact at Kent and Butler hospitals, as well as the VNA of Care New England.”

The jobs being eliminated affect “a wide array of staff across the system, including clinical and non-clinical, union and non-union employees,” he said.

The news comes just a week after Partners HealthCare, the largest hospital group in Massachusetts, announced plans to acquire Care New England, which has been facing financial challenges in recent years. As part of the deal, Care New England plans to spin off Pawtucket’s Memorial Hospital to the group that owns Woonsocket’s Landmark Medical Center.

Care New England says it currently has the equivalent of about 6,580 full-time employees. Beardsworth declined to say how many jobs were cut this week, but insisted the move was “not related” to the merger announcements but rather “the result of an ongoing and exhaustive review of our operations.”

Care New England lost $13.9 million during the final three months of 2016, following an annual loss of $53 million during its 2015-16 fiscal year. The hospital group’s executives have put some of the blame for their struggles on the state health insurance commissioner’s office, which they say has capped payment rates too low to cover costs.

Patrick Quinn, executive vice president of the SEIU 1199 union that represents 2,200 Care New England employees, said hospital management has informed his group that fewer than seven union workers will be laid off. In a statement, Quinn said the union “will fight hard to reverse any layoff notices because our hospitals are already understaffed.”

Quinn also took aim at executive pay at Care New England. In its most recent tax filing, the hospital group reported spending $5.7 million on compensation for officers, directors trustees and key employees; President and CEO Dennis Keefe earned more than $1.4 million.

“If Mr. Keefe paid himself only $1 million, roughly $500 per hour, and other high-paid administrators took a modest compensation reduction during these financially challenging times for CNE, many, if not all, of these announced layoffs could be averted,” Quinn argued.

Women & Infants President Mark Marcantano said his hospital, which delivers most of the babies born in Rhode Island, has been trying to improve its finances. “Unfortunately, it has not been enough, as we have continued to experience reduced volumes due to changing demographics, reduced inpatient neonatal care, a declining birth rate, and a decrease in reimbursements,” he said.

Marcantano said the share of patients insured with lower-paying options such as Medicaid is “worsening,” and the volume of babies who enter the neonatal intensive care unit, or NICU, “is likely not going to recover to the levels that we previously experienced.” In the past officials have noted that the revenue tied to just a few babies going into the NICU is significant enough to mean the difference between Women & Infants operating in the black or in the red.

“The irony, of course, is that this trend is good news from a public health perspective [in] that there are fewer sick and premature infants,” Marcantano said. “Unfortunately, that good news does have a significant impact on our financial health under our current payment systems.”

Marcantano was more candid in an internal email, telling employees, “It’s been a difficult few days at Women & Infants Hospital.  Undoubtedly some of the most emotionally challenging days that I’ve faced in my seven years here.” He described the job changes as “the elimination of some positions and a reduction in hours for others.”

“All Women & Infants staff who are affected have now been notified,” he added.

Scott Jensen, director of the R.I. Department of Labor and Training, said the state is offering Rapid Response Services to Care New England employees who lost their jobs. His comments also suggested that the Raimondo administration may look favorably on Care New England’s proposed deal with Partners.

“Protecting jobs in Rhode Island’s health care sector is among Governor Raimondo’s top priorities,” Jensen said in a statement. “Today’s concerning announcement of layoffs at Women & Infants sharply underscores the need for the hospital’s parent healthcare system, Care New England, to get its fiscal house in order by partnering with a stable health care system.”

Asked whether patients would see the impact of the staff cuts, Marcantano said: “I would say we’ve done everything in our power to make sure that remains un-impacted, that it’s seamless when it to comes to those interactions and episodes, and processes. It’s all about the patients and the families.”

Marcantano downplayed the possibility of further layoffs, but didn’t rule it out. “We’re hoping that we will have a chance to digest and process what we’ve done, and move on. But we’ll have to see what happens going forward,” he said.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook

An earlier version of this story reported Care New England’s employee count had fallen from 8,171 in 2014 to 6,580. However, a spokesman later clarified that the former figure was actual employees, while the latter figure was full-time equivalents; the number of actual employees is currently about 8,000.