Baystate Health Cuts 354 Jobs

Baystate Health said it will eliminate 354 jobs from its payroll --- including 169 filled positions -- to help offset financial woes that the Springfield, MA health system blames mainly on lower patient volumes and reduced Medicaid reimbursements.

Baystate projects a $25 million budget shortfall in 2011 growing to $54 million in 2012 unless expenses are reduced.   

“At Baystate Health, we embrace changing models of patient care and health coverage expansion – however, these changes are not based on a properly funded plan,” Mark R. Tolosky, president/CEO of private, not-for-profit Baystate Health, said in a media release. “Massachusetts has expanded and enhanced healthcare for our residents which we applaud – but the Commonwealth is not paying for these commitments.”

Tolosky said Massachusetts healthcare providers are faced with freezes in reimbursements for patient care by Medicaid and other state programs while medical inflation is rising at 3% - 4% annually, and that Baystate is paid less than the cost of the care it provide.

The three hospitals of Baystate Health -- Baystate Medical Center in Springfield, Baystate Franklin Medical Center in Greenfield, and Baystate Mary Lane Hospital in Ware -- were underpaid $26.5 million by the state government for the cost of care for Medicaid patients in 2010. Medicaid patients represent 26% of the patient population at Baystate’s hospitals, resulting in significant financial loss for care of these patients.

With declining reimbursements, Baystate and other healthcare providers throughout Massachusetts are seeing patients hold back on medical care for reasons that include increased out of pocket costs and concern about time away from their jobs, all which have led to lower patient volumes.

Baystate Medical Center will bear the brunt of the layoffs, with 158 positions eliminated. Baystate officials declined to say what staffing areas were targeted for cuts, which will take effect Aug. 19. They said the cuts would not impact patient care. The 354 funded payroll cuts represent 3.5% of the 10,064 positions at Bayhealth.