SalemNews.com, Salem, MA

August 18, 2010

Beverly Hospital sees another round of layoffs

CEO warns actions 'only the beginning'

By Bruno Matarazzo Jr.
Staff Writer

BEVERLY — A second round of layoffs began yesterday at Northeast Hospital Corp., as the health care organization looks to eliminate up to 100 full-time positions.

Corporate handed out pink slips to personnel ranging from vice presidents to nurses yesterday at the nonprofit organization's three hospitals, Beverly Hospital, Addison Gilbert Hospital in Gloucester and BayRidge Hospital in Lynn, and two outpatient centers, Beverly Hospital at Danvers and the Cable Center in Ipswich.

Twenty-two positions were eliminated in November. The health care company is looking to cut between 75 and 100 positions total. The organization employs the equivalent of about 1,800 full-timers, according to company officials.

Pauline M. Pike, chief operating officer of Northeast Hospital Corp., said the layoffs are the first part of three phases in an ongoing restructuring of the organization.

"What we're trying to do is reposition for change. We're doing that in a way that does not compromise quality, patient safety or service responsiveness," Pike said. "We've done that in a way that was very thoughtful but very painful, and we do acknowledge that."

The layoffs are designed to save the company a total of $15 million.

Pike wouldn't say yesterday where the layoffs occurred throughout the organization, since not all have been completed.

Two vice presidents lost their jobs, she said, however. In addition, 20 nursing positions that were open will not be filled now.

Pike said she does not believe any positions in emergency departments were affected.

As part of her role, Pike said she's been meeting with departments throughout the hospital informing them of the changes happening and answering questions.

"People are nervous, but they knew it was coming," Pike said.

Employees were notified by letter in late April of Northeast Hospital's plans to pare as many as 100 full-time jobs from the payroll.

The corporation determined who to lay off based on information from FTI Consulting Inc., and that firm's recommendations were given the green light by senior management, according to a letter sent to all employees by Northeast Hospital Corp. CEO Ken Hanover.

"Unfortunately, this week is only the beginning of what will likely be a three-phase process, which will be implemented during the next four to eight months," reads Hanover's letter, dated yesterday. "... I recognize the anxiety a prolonged process will create within our work force, however, changes must be implemented with caution and care necessary to ensure their appropriateness and sustainability."

Hanover, who became the head of the company last October, said in a letter in late April that patient care volume and revenues have fallen behind projections since the start of the fiscal year in October. The organization is also expecting a decline in Medicare payment rates and no increases in Medicaid and private health insurance rates.

The corporation had revenues of $350 million in fiscal year 2009.