Hospital layoffs blamed on state tax, fluctuating patient levels

SHARON — “Fluctuating volumes” of emergency room patients and hospital inpatients were given as a major reason for a significant reduction in staff at Sharon Hospital.

The hospital’s president and CEO, Kimberly Lumia, also cited a substantial new tax levied on the hospital by the state as another reason for the layoff of 26 employees on Wednesday, March 21.

“Our goal is to have a right-sized organization for the volume of patients, so we’re back to our 2010 levels of staffing,” Lumia said.

The layoffs were done in all departments, Lumia said, although no physicians have been let go. Twenty hospital staffers were let go and six employees in the hospital’s physician group, Regional Health Care Associates, were let go.

While there were 26 people affected by the layoffs, the staff reduction equals 40.3 full-time equivalent hours, known as FTEs. One full-time equivalent position is defined as 40 hours.

Lumia said the layoffs are not coordinated with any of the other seven hospitals owned by RegionalCare Hospital Partners, the Tennessee-based organization that merged with Essent Healthcare last September. They are specific to Sharon Hospital.

“We are decentralized from RegionalCare, so these were strictly Sharon Hospital layoffs.” she said.

Sharon is the only for-profit hospital in the state and paid more than $1 million in taxes to the state and federal governments last year, according to the hospital’s annual report released this week. Gov. Dannel P. Malloy’s administration has also levied a new “provider tax” on health-care providers in the state, which will cost Sharon Hospital an additional $700,000 in taxes, Lumia said. This new provider tax was one resurrected from the 1980s, when it was eliminated after its first run in the state.

The tax hit was among reasons the hospital administrators decided it was time to make the staff reductions, Lumia said. Another is “fluctuating volume” of patients using the hospital.

“The community determines the level of staffing here, in a sense,” she said. “When people choose Sharon Hospital, it helps us. We’re here for the community; the community needs to be here for us.”

She remained upbeat about the hospital’s future and emphasized that, “We will remain here to be the Northwest Corner’s choice of hospital. That is our goal.”

The hospital’s patient satisfaction scores remain “very high,” she said, and the hospital remains committed to providing high-quality care and an array of services. The new wound care center, pain management center and sleep center have been popular and successful, she said.

The hospital has maintained the number of doctors it employs, she said. Several new doctors have joined the staff in recent years, she noted, and patient volume is likely to rise in time as those doctors establish a reputation and grow.

For the moment, though, she said the hospital administration felt it was prudent to make cuts. The staff reductions were only made after other cost-cutting measures were put in place, she added, such as reducing overtime costs and making sure supplies were being purchased efficiently.

A press release about the layoffs, headlined as “Sharon Hospital Makes Adjustments,” noted the staff reductions “include layoffs, attrition of open positions and decreased hours for some staff. Eligible employees will receive severance pay and the option to receive continued health benefits as provided under COBRA.”

“We did not reduce anyone’s hours below the level where they would receive benefits,” Lumia said. “We tried to be fair and compassionate.”

She said the cuts were made at all levels of management and staff, with input from each department manager, again in an effort to be fair.

Ultimately, she said, “We had to be realistic and I feel that we are doing the right thing. I feel upbeat about this for the long-term health of the hospital. My goal is to have the hospital here for the community long after I am no longer here.”

The last time Sharon Hospital had multiple layoffs was before Lumia’s tenure as president and CEO, in 2008 when then-president and CEO Charlie Therrien layed off about eight people, Lumia said, or 10 FTEs.

“We did take measures to downsize internally, though, in 2009 and 2010, through attrition and distributing the work differently,” she said. “We are not immune to the challenges facing all hospitals, like bad debt and higher expenses. We will maintain the high quality of care for our community.”

<em> Janet Manko contributed to this report. This article was updated from a previous article that appeared on this site. </em>