– Boston-based Brigham and Women’s Hospital lately introduced 1,600 staff with a voluntary buyout choice in an effort to management the power’s healthcare prices, an area information source reported.
Hospital officers reassured reporters at The Boston Globe that Brigham and Women’s was nonetheless worthwhile, accumulating about $2.7 billion in income and $93 million in operations in the course of the fiscal yr that ended on Sept. 30, 2016.
However, decrease claims reimbursement charges underneath healthcare cost reforms and greater labor and operational prices prompted officers to supply the voluntary buyout.
The hospital can also be managing debt from a number of current tasks, together with a $510 million new constructing that opened final yr and a $335 million EHR implementation undertaking from 2015. The Epic EHR implementation initiative notably got here up $53 million in need of its $121 million surplus expectation in 2015.
“This is a challenging time for the healthcare industry,” a Brigham and Women’s spokesperson said in an e mail to RevCycleIntelligence.com. “Our expenses continue to rise while constraints by government and payers are keeping our revenues flat. This is negatively affecting our financial health, and we need to work differently in order to sustain our mission for the future. Alongside ongoing efforts to create efficiencies, we are at a point where we also need to right-size our workforce.”
With their sights set on decreasing healthcare prices, the hospital provided voluntary buyouts to staff 60 years or older. The buyout additionally consists of one yr of base pay.
About 5,300 physicians, researchers, and different employees holding MD or PhD levels won’t be eligible for the buyout, the report added. Boston Globe reporters famous that decreasing the variety of physicians employed would disrupt affected person entry to care. Research employees have a tendency to obtain compensation by way of outdoors grants and don’t add to the hospital’s payroll prices.
The buyout choice goals to scale back labor prices that at present make up 66 % of the Brigham and Women’s prices.
“This will help us to reduce our full-time employee count, respect and honor those whose careers are winding down and create opportunities for emerging leaders within the organization,” the spokesperson added. “We owe it to our current patients – and those who will need our care in the future – to tackle the unprecedented financial challenges we are facing so that Brigham Health is here to care for patients, transform medicine and educate future healthcare professionals for generations to come.”
In addition to the buyout plan, officers additionally informed the native information source that they’ve additionally made efforts in different areas to lower healthcare prices. The hospital has left open positions vacant, standardized their healthcare provide chain, and redirected some sufferers to their lower-cost Faulkner Hospital when applicable.
Hospital leaders plan to additional reduce healthcare prices sooner or later by way of potential layoffs. Although they have no idea precisely what number of staff could possibly be laid off later this yr. The quantity will largely rely upon what number of staff settle for the voluntary buyout supply.
Other hospitals have additionally just lately turned to employees reductions as a key technique for decreasing healthcare prices.
Mercy Hospital in Portland, Maine additionally provided staff an analogous buyout choice in July 2016, in accordance to a Portland Press Herald report. The hospital of 1,500 full-time staff on the time gave the choice to 99 nurses and different staff apart from physicians, nurse practitioners, doctor assistants, nurse anesthetists, managers, and staff who work with sufferers with consuming issues.
The small Maine hospital went on to lay off 31 staff about two months after the voluntary buyout supply, the information source reported.
Buyouts at smaller hospitals will not be unusual. But Boston Globe reporters identified that the Brigham and Women’s supply confirmed that even giant, high-quality hospitals are feeling the strain from healthcare cost reform and different market forces.