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St. Francis Hospital To Lay Off 200 In August


July 28, 2010

HARTFORD — — St. Francis Hospital and Medical Center will lay off about 200 employees in late August, as a shortfall in reimbursements for Medicare and Medicaid and a "modest decline" in patients exacerbates an already tight financial picture, the hospital's chief executive said.

"In combination, these developments have challenged us to take these painful steps," Christopher M. Dadlez said in a brief written statement.

St. Francis said it had not yet determined which employees would be cut. A spokeswoman for the hospital would not comment further and would not elaborate on the mix of doctors, nurses or support staff included in the planned layoffs.

The hospital, in Hartford's Asylum Hill neighborhood, has about 3,500 employees.

"This is a very difficult, but entirely necessary decision," Dadlez said. "These measures will not compromise the quality of care that we deliver each day. They will, in fact, ensure our ability to continue our promise to provide the very best care possible for our community."

The hospital announced the layoff to staff members on Wednesday, the statement said.

St. Francis, with 572 beds, had a deficit of $31.7 million, or 5.6 percent of its total revenue, in the year ending June 30, 2008, according to a state report. That year, the cost of care that the hospital provided without receiving payment grew from $12.5 million to $15 million. But in fiscal year 2009, St. Francis was in the black, with a 1.8 percent margin, the state Office of Health Care Access reported.

In 2009, as investments recovered and as hospitals slowed the pace of spending, in part by reducing staff through attrition and layoffs, more of the state's 30 acute-care hospitals were in the black. Sixteen had higher surpluses or profits than St. Francis in fiscal year 2009, and 13 had worse financial performance. A report for the most recent fiscal year is not yet available.

Hospitals have faced financial challenges not only from reimbursement rates, but also from competition such as free-standing, urgent-care centers, more than 100 of which are in Connecticut. Growing competition and health care reform represent both a challenge and an opportunity for hospitals, the report said.

The 2008 state report said that Medicare reimubursements, while dropping, still covered St. Francis' cost of delivering services. But Medicaid reimbursements only paid for 72 percent of the cost. Medicare patients made up 45 percent of the mix at St. Francis; Medicaid patients were 12 percent.

Health care jobs have been among the bright spots in the state's economy since the recession began. As most industries shed jobs in 2008 and into 2009, health and social assistance employers continued to add staff and, more recently, the total number of people working in health and social-assistance fields has been stable.

Hospital employment is not tracked separately by the state, but hospitals have weathered financial pressure not only from basic operations, but also in investments — a "traditional buffer" against financial woes, according to state reports.

Health care union representatives said that St. Francis has no unionized employees.

Several nurses and other staff members at the hospital declined to talk about the impending layoffs Wednesday evening.

—Courant staff writer Julie Stagis contributed to this story.

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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