Cutbacks without layoffs: How one Maine hospital plans to do it

Budget cuts and staff layoffs seem to go hand in hand at many hospitals. However, St. Joseph Healthcare in Bangor, Maine, will implement a set of cost-saving measures designed to save $250,000 a month--with the goal of avoiding staff layoffs, reports the Bangor Daily News. Measures that will be in effect June 1 through year-end include eliminating the employer match to workers' retirement funds, tuition reimbursements, student loan repayment benefits for new staff, financial bonuses for nurses who work outside their usual clinical assignment areas, and incentives for contingent (per-diem) nurses to work a specified number of hours. Also, from June 1 through Dec. 31, the hospital will cut back funding for physician continuing education and reduce hourly employees' overtime.

Additional changes will be enforced over the next three months. These include requiring full-time hourly employees to take one unpaid furlough day per month and requiring part-time employees to take off a pro-rated amount of unpaid time. Also, all administrators and executives will receive a 5 percent pay reduction. These staff furloughs and pay cuts will be reviewed in July to determine if they need to be extended.

There is potential light at the end of the tunnel for St. Joseph employees. Several hospitals have been able to roll back staff pay cuts, most recently Sonoma (Calif.) Valley Hospital. Last week, Sonoma Valley announced plans to lift a 5 percent salary cut instituted in January for non-administrative employees, reports the Sonoma Index-Tribune. "When we originally implemented them, we told [the staff] we'd implement [the pay cuts] for 90 days and then review where we are," says CFO Tim Noakes. "We're at that mark...and we're doing better financially. We wanted to recognize that sacrifice of the employees." Furloughs of many administrative staff members will remain in place.

To learn more:
- read this Bangor Daily News article
- read this WABI-TV report
- take a look at this Sonoma Index-Tribune article