Cape Cod Healthcare To Eliminate 169 Positions

     In one of the largest layoffs in its history, Cape Cod Healthcare announced yesterday that 169 positions throughout the company are being eliminated.
     “On my hiring, I was here on a happy occasion,” CEO Dr. Richard F. Salluzzo, who replaced outgoing CEO Stephen L. Abbott in July, said yesterday morning at a press conference at Cape Cod Hospital. “Today is obviously not one of those occasions.”
     Dr. Salluzzo said the cuts are being made to address a $25 million shortfall in operating costs and a $15 million loss in net income for the 2008 fiscal year. “It will take courage and leadership to fix this,” he said.
     The cuts that were announced yesterday, Dr. Salluzzo said, should save Cape Cod Healthcare $13 million. The majority of those will be made at Cape Cod Hospital, which will lose 91 positions. Falmouth Hospital, which has more than 960 employees, will lose 27 employees. The remaining 51 positions will be spread out through the remainder of Cape Cod Healthcare’s corporate areas.
     In addition to the two hospitals, the company owns the Visiting Nurse Association of Cape Cod, Community Health Center of Cape Cod, and Heritage at Falmouth.
     He noted afterward that Falmouth Hospital has historically been profitable, but has not been immune to financial difficulties, experiencing losses of roughly $1 million. The VNA, he said, is still profitable, while JML Care Center is breaking even.
     A total of 33 positions are managerial and 123 are regular staff positions, with 87 of those union personnel. A final 13 employees will take an early retirement or have their hours cut.
     Departments that will be impacted include pastoral care, food services, financial services, information technology, patient accounts, cardiac services, medical records, volunteer services, human resources, urgent care center, marketing, and legal.
     He stressed that Cape Cod Healthcare has a fiduciary responsibility to ensure appropriate staffing levels so that quality care is not compromised. “Our goal is to become safer and better in every way so as not to take a step backward,” Dr. Salluzzo said. He referenced the minimal reductions being made to the company’s clinical staff, where only seven registered nurses will be laid off, as a prime example.
     Beyond that, Dr. Salluzzo refused to name specific positions that were being eliminated as affected employees will be notified this week. “As Cape Cod’s largest employer, we understand the impact of our announcement today,” he said. “Obviously, this is the most painful part of our expense reduction program.”
     He explained that these changes are being made out of necessity. “Our present financial performance is not sustainable,” he said.
     “None of us will be served well if we go into a General Motors-like spiral,” he added. “We are trying to act at the right time and do the right thing.”
     Since 2004, he noted that admissions have declined by nearly 600 patients, a trend that has been mirrored by a decline of in-patient and out-patient surgeries. Yet, during that same time, the company hired over 130 employees.
     Where appropriate, he said, employees will receive severance packages. The company will be offering outplacement services, including resume writing, job placement, and counseling to its former employees through Transitional Solutions of Boston. In addition, the career center of Barnstable Workforce Investment Board will provide career assistance as well.
     In addition to staff reductions, Dr. Salluzzo said, the company will be streamlining its operations, making improvements to physician and patient coding, while reducing legal and consulting fees. He anticipated these changes would save an additional $15 million for Cape Cod Healthcare.
     In light of yesterday’s drastic announcement, Dr. Salluzzo promised that the company would continue to remain one of the country’s leaders in providing quality healthcare.
     He highlighted some of its achievements in the clinical field, noting that its mortality rate of 1.8 percent for cardiac surgery is below the state and national rates and even tops some of Boston’s medical centers. Cape Cod Hospital had one of the lowest rates nationwide for 30-day AMI, or heart attack, mortality.
     Meanwhile, Falmouth Hospital has been recognized by the American Stroke Association for implementing higher standards for stroke care over the past two years.
     And both facilities rank in the top 10 percent of 1,742 hospitals surveyed nationally when it comes to patient satisfaction.
     So with all these achievements, why is Cape Cod Healthcare experiencing record losses?
     Dr. Salluzzo explained that his company’s problems are endemic of a failing medical system in this country. Cape Cod Healthcare, he said, is not alone, noting that more than 50 percent of all the state’s hospitals are now mirroring the difficulties at his company, experiencing losses in both operating costs and net income.
     These drastic changes in the state’s healthcare are only compounded by a difficult economy. If nothing changes, he warned, 10 to 20 percent of all hospitals in this country could be shut down. “This is not just a blip on the radar,” he said, arguing that the solution to these problems resides in universal healthcare. “No nation is modeling the healthcare coverage in our country,” he said.
     He said Cape Cod Healthcare’s problems are the result of a “perfect storm,” impacted by a number of factors that include a severe physician shortage, being in a recession, and having a large portion of its revenues coming from Medicare, whose 2 percent increase in reimbursement does not offset the rise in Medicare costs.
     Despite these problems, he called for “everyone on the Cape to pull together to get us through this difficult period in our history.”