Strained by flat patient volume and pressure from health insurers, UMass Memorial Health Care, which runs five hospitals, said yesterday it will eliminate about 350 jobs or nearly 2.6 percent of its workforce — the largest hospital cutback in Massachusetts this year.
The health care system, which operates the UMass Memorial Medical Center in Worcester and four community hospitals in Central Massachusetts, said it expects to lay off 130 workers, freeze 120 vacant jobs, and shed the equivalent of 100 jobs by reducing overtime and shifting employees from full time to part time. The system employs 13,700 workers.
“We’re trying to prepare our selves for the longer term,’’ John G. O’Brien, chief executive of Worcester-based UMass Memorial Health Care, said in an interview. “We don’t think the pressure on hospitals to reduce costs will abate for several years.’’
The staff reductions will affect a range of hospital workers, from nurses and pharmacists to finance and marketing managers. The cost-cutting comes at a time when the 1,125-bed health care system is still making money, though profits are down; it is on course to post an operating gain of $50 million this year, compared with $84 million last year.
UMass Memorial Health Care’s financial problems are the latest evidence of how severely the weak economy and the push to rein in health care costs are taking their toll on hospitals, a pillar of the Massachusetts economy once thought to be immune to downturns. A growing number of the state’s hospitals — particularly those, like UMass Memorial Medical Center, that serve many low-income patients on Medicaid — are feeling the pinch.
Last month, Boston Medical Center, which treats many of the city’s neediest patients, said it would pare 119 jobs from a workforce of 6,000, a 1.9 percent reduction. Across the Charles River, the Cambridge Health Alliance, which runs so-called safety net hospitals in Cambridge, Somerville, and Everett, has cut hundreds of jobs over the past 18 months, though many of its cuts took place in 2009.
Over the summer, Northeast Hospital Corp. in Beverly, which operates hospitals in Beverly, Danvers, Gloucester, and Lynn, said it would cut 75 to 100 jobs, while Berkshire Health Systems said it would eliminate 124 jobs at the Berkshire Medical Center in Pittsfield.
“Hospitals are squeezed to the max,’’ said Boston health care consultant Ellen Lutch Bender. “They’re having to look at everything on their balance sheets to see where they can save money. The days of luxury have floated away. They’re gone. We live in a very challenging time in our economy and it’s clearly impacting our health care system.’’
At UMass Memorial Health Care, the largest hospital system in Central and Western Massachusetts and the clinical partner of the University of Massachusetts Medical School, the workforce has grown steadily from about 10,500 in 2001. But anticipated payments from Medicaid, the federal Medicare program, and private health plans all were pared in its 2010 fiscal year. That resulted in a systemwide revenue increase of 1.8 percent, far less than in the past several years.
Meanwhile, the number of patients admitted to UMass Memorial Medical Center and its community affiliates — Clinton Hospital, HealthAlliance Hospital in Leominster, Marlborough Hospital, and Wing Memorial Hospital in Palmer — was flat, while the number of surgeries increased at a lower rate than in the past. That left the system’s budget about $85 million below a financial target for the 12 months ended Sept. 30 — a surplus that would enable the system to invest in innovation and clinical care.
Most of the job losses will be at UMass Memorial Medical Center, the three-campus flagship hospital, but some will hit the four community hospitals as well. Both unionized workers and managers will be affected.
“We feel very bad all these forces have converged in the past six to 12 months,’’ said O’Brien. “But we’re going to have to provide better value going forward. We’re going to have to reduce costs, but at the same time we’re going to have to provide higher quality.’’
Nurses from across the state plan to picket the medical center’s downtown Worcester campus today to protest cutbacks that began even before yesterday’s formal notice to workers. Massachusetts Nurses Association spokesman David Schildmeier said the rally was called after UMass Memorial Medical Center announced last month that it would close a 28-bed medical surgical floor and lay off 27 nurses along with support staff.
Schildmeier faulted the Worcester hospitals and other Massachusetts providers for reducing staff and implementing cost-cutting “lean’’ techniques even though they are still profitable.
“Already, without the closing, there are no beds available and patients are regularly backed up in the emergency department,’’ Schildmeier said. “And the flu season hasn’t even hit yet. This is a sign of what’s coming. There’s going to be tremendous unrest between hospitals and the health care union in the coming year.’’
Dr. Walter Ettinger Jr., president of UMass Memorial Medical Center, said the move to close the surgical floor was part of the broader staff reduction and an effort to boost the patient occupancy rate at the hospital’s downtown campus.
Ettinger acknowledged there are sometimes backups there, but he said those were cyclical.
He also defended the lean management steps as strengthening the hospital system while it still has the financial resources to serve its mission. “We want to make changes while we’re still profitable because we don’t want to be in a position where we’re losing money and we can’t do this carefully and thoughtfully,’’ Ettinger said.
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