SPRINGFIELD, MA – Citing an anticipated infusion of $17 million from the Centers for Medicare & Medicaid Services aimed at helping rural hospitals, the Service Employees International Union has called on Baystate Health to back off plans to eliminate 354 jobs.
The planned workforce reductions announced last month by Baystate, which operates three hospitals in western Massachusetts, are the result of continuing cuts in hospital reimbursements by the state, according to company officials.
“At Baystate Health, we embrace changing models of patient care and health coverage expansion – however, these changes are not based on a properly funded plan,” said Mark R. Tolosky, president and CEO of Baystate Health in a press release announcing the planned cuts. “Massachusetts has expanded and enhanced healthcare for our residents, which we applaud – but the Commonwealth is not paying for these commitments.”
The result is that Baystate’s three hospitals – Baystate Medical Center in Springfield, Baystate Franklin Medical Center in Greenfield and Baystate Mary Lane Hospital in Ware – were underpaid by $26.5 million in 2010 for state Medicaid patients based on the actual costs to provide their care.
According to hospital management, the staff reductions are necessary to close the gap on a projected loss in 2011 of $25 million dollars, a gap that is expected to total $54 million in 2012 if the hospital operator takes no action.
But 1199 SEIU contends that with the new CMS payment formula for rural hospitals set to take effect beginning Oct. 1, the time is now for Baystate to re-evaluate its staff reduction plans, which were slated to take affect Aug. 19.
“The $17 million in new funding for Baystate came to light after the layoff announcement was made,” said Jeff Hall 1199 SEUI spokesman. “Our members are asking them to slow down the process and reconsider their plans based on these new funds.”
Hall noted that there are currently no members of 1199 SEIU employed by any Baystate facilities and rejected the notion that the union’s call was a ploy to unionize the company, adding that there is no current organizing effort for the union at Baystate.
“One of the great things about 1199 is they don’t just advocate for themselves, but for healthcare jobs and patients, whether it affects them directly or not,” he said.
The union has made its point directly to Baystate Health’s management team via a letter sent to Tolosky from Veronica Turner, executive vice president of 119 SEUI. In it, she cited Baystate’s strong financial performance in the past, including an operating profit of $49 million for 2010 as an additional reason to reconsider its layoff plans.
But Jane Albert, a spokesperson for Baystate Health told the Boston Herald that the $49 million has “all been reinvested (and) doesn’t even reach the level we need . . . in order to invest in capital and our facilities and technology. In the context of the entire operation of Baystate Health on a $1.6 billion budget, there are a lot of capital needs that as a nonprofit we have an obligation to do and to provide the best care for our patients.”
Despite the current tiff, the two sides do agree on one item: the inadequate funding provided by Massachusetts for state-sponsored care.
“We understand and recognize the challenge that healthcare employers face from funding shortfalls, primarily inadequate reimbursement rates from public payers,” Turner wrote in her letter. “As you are aware, 1199 SEIU members have been at the forefront of the battle to prevent cuts to Medicaid and Medicare. However, your decision to eliminate these positions is not the only viable course of action.”
