WORCESTER, MA – UMass Memorial Health Care in Worcester, Mass., will reduce its workforce by 700-900 in response to declining patient volumes and reimbursement, officials announced Wednesday.
In a letter to employees, John O’Brien, president and CEO of UMass Memorial, said the system needs to immediately reduce expenses by about $50 million in order to avoid ending the current fiscal year with a loss.
The response plan calls for the following steps that will mostly affect UMass Memorial Medical Center:
- Elimination of approximately 150 full-time equivalent positions from the Medical Center, Medical Group and corporate “overhead” departments. Eliminations will particularly be in areas where expected volume projections are not being met, although other programmatic changes are expected. The detailed reduction plan is being finalized.
- Reduction in the expenses of Worcester-based corporate “overhead” departments.
- Curtailment of hiring for corporate departments, Medical Group and Medical Center with the only exceptions to be positions that impact patient care and safety.
In addition to these steps to address the declines in volumes and reimbursements in the first quarter of fiscal 2012, O’Brien said UMass Memorial also “continues to review services and programs throughout the system to assure that we are offering care in the right settings that are financially sustainable.”
O’Brien also announced that UMass Memorial is in confidential discussions with a potential buyer regarding the sale of its Hospital Labs Outreach Business.
“Reimbursement for lab tests have been falling dramatically for quite some time and insurers are directing their patients and physicians to use labs that are lower cost than our service,” said O’Brien.
And, in a third development, UMass Memorial will seek a potential buyer for its Worcester-based Home Health and Hospice (HH&H), which lost $2 miilion last year and is seeing a significant decline in referrals.
“Because our HH&H is part of an academic medical center, its cost structure is higher than community-based agencies,” said O’Brien. “For now, we will continue to care for patients and continue to accept referrals of new patients. This step will not affect the HH&H services at our HealthAlliance Hospital and Wing Memorial Hospital.”
In total, the three actions could result in the elimination of 700-900 positions at UMass Memorial.
Follow HFN Editor Rene Letourneau on Twitter @ReneLetourneau.
