Cuts at St. Joseph Healthcare, but no layoffs

Posted April 21, 2010, at 8:07 p.m.

BANGOR, Maine — St. Joseph Healthcare on Wednesday announced cost-saving measures aimed at avoiding staff layoffs.

Sister Mary Norberta, president and CEO of the organization, said she hopes the changes, which include a temporary 5 percent reduction in all executive salaries, will save a quarter-million dollars each month they are in place.

Most of the measures announced to employees at an afternoon meeting at St. Joseph Hospital will take effect June 1 and stay in effect through the end of 2010. They include:

— Eliminating the employer match to workers’ retirement funds.

— Eliminating tuition reimbursement for classes that start after June 1.

— Eliminating student loan repayment benefits for new employees.

— Eliminating financial bonuses for nurses who work in clinical areas outside their usual assignments.

— Eliminating incentives for contingent, or per diem, nurses to work a certain number of hours.

— Reducing the amount of money available to physicians for continuing education.

— Reducing overtime worked by all hourly employees.

— A requirement that all full-time hourly employees take one unpaid furlough day a month for the next three months, with a pro-rated amount of unpaid time off for part-time employees.

— A 5 percent reduction for the next three months in the salaries of all administrators and executives, including Sister Norberta.

The mandatory staff furlough days and executive salary reductions will be reviewed in July and extended if necessary.

The changes will affect approximately 800 hospital employees as well as employees of other St. Joseph Healthcare affiliates, which include physician practices and other outpatient services.

Sister Norberta said health care revenues are declining in response to difficult economic times as people put off medical appointments and elective procedures to avoid paying out-of-pocket costs. At the same time, the number of Mainers with no health care coverage is increasing, she said, driving up the amount of free or re-duced-cost care the nonprofit hospital must provide, as well as the amount of uncollected debt it is owed.

Many hospitals in Maine have implemented cost-saving measures in response to the economic downturn. Eastern Maine Medical Center in Bangor recently laid off 50 employees and provided early retirement benefits to 50 others.

The changes announced Wednesday will not be easy for the employees of St. Joseph Healthcare, Sister Norberta said, but they are preferable to cutting jobs.

“A layoff would be easier,” she said Wednesday, “but we didn’t want to do that.” She did not rule out the possibility of layoffs, however. She said changes included in the recently enacted reform of the nation’s health care system ultimately will benefit Mainers and Maine health care providers, but those benefits have not yet been felt.

The salaries of Sister Norberta and other St. Joseph executives who are members of the Felician Sisters are paid to the Connecticut-based Catholic order, so the 5 percent reduction will be felt at that level, Sister Norberta said. The modest living allowances provided to the seven Felician Sisters employed by St. Joseph Healthcare will not change, she said.

In a recent survey of the salaries of Maine hospital CEOs, Sister Norberta’s salary was reported at $330,000.

Employees at the meeting on Wednesday responded with relief to the news that there would be no layoffs, Sister Norberta said, although the reductions will cause hardship for many. Some employees already have offered to work fewer hours to ensure that harder-hit co-workers get the hours they need, she said.

“I am proud of our employees; they are really sticking together,” she said. “I told them that tough times don’t last, but tough people do.”

St. Joseph Healthcare is affiliated with Massachusetts-based Covenant Health Systems.

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