[S]pringfield Hospital eliminated 27 positions Friday as part of a system-wide reduction in salaries and expenses.
As part of the reductions, every hospital employee will receive a pay cut starting Feb. 24. Hospital managers will see a 10 percent salary reduction while hourly staff will see a 4 percent reduction.
“These decisions are incredibly difficult, and we have worked hard to limit staffing reductions as we begin the turnaround necessary to stabilize this organization,” Springfield Medical System chair George Lamb said in a press release.
The eliminations come after the state loaned the Springfield $800,000 on Tuesday to rescue the hospital from immediate closure.
The hospital needs to reduce expenses by about $6.5 million annually to stabilize. Interim CEO Michael Halstead said the restructuring effort will reduce expenses by nearly half that amount. The hospital is examining all vendor contracts to find the additional savings. Services such as the childbirth center, the behavioral medicine program and certain surgical procedures could also be cut.
“We’re turning over every rock,” Halstead said.
Springfield Hospital employs about 450 people. The cuts represent about 6 percent of the workforce, Halstead said. The cuts came from several departments and they were selected after conducting a data analysis of the needs in each department.
More staff positions could be eliminated in the future, he said.
Halstead, who has about 40 years of experience in health care, became interim CEO two weeks ago. He is employed by Quorum Health Resources, a hospital management company that has a six-month contract with Springfield Hospital to help right the ship.
“I told my wife this may be one of the toughest things I’ve ever done,” Halstead said.
Halstead, who lives in Tennessee, came into the Springfield Hospital position with little time to analyze the situation before needing to take action.
“The challenge was very evident to me,” Halstead said. He emphasized the community needs to support the hospital going forward.
“My fear is that what we’re doing here with cost reductions will scare people,” he said. “Instead of increasing market share, we’re at risk of losing market share because of how people perceive what we’re doing.”
The hospital may file for bankruptcy in the coming weeks. The hospital is also in early conversations about an affiliation with Dartmouth-Hitchcock Medical Center.
“There is no denying this is a very challenging time for us,” Chief Medical Officer Cecil Beehler said in a news release. “SMCS and Springfield Hospital play a critical role in our region.”
Springfield Hospital marketing chief Anna Smith was cautiously optimistic that the hospital would find its way to stability.
“It’s going to be a long road between here and there,” Smith said.
