Harrington Eliminates 12 Jobs, Cuts Hours
After several years of growth, Southbridge-based Harrington HealthCare is cutting 12 jobs, said President and CEO Edward H. Moore.
"We've had several years (from) '07 to '11 of significant growth, but then in '12, things just really slowed down due to a variety of factors in terms of our volume we've seen," Moore said.
He said those factors include a declining rate of federal reimbursement as well as higher insurance co-pays, deductibles and a generally weak economy forcing people to limit the amount of care they receive.
Moore said 20 positions are being eliminated, including both clinical and non-clinical jobs, but that eight of the people affected will transfer to other roles. Nine positions that have been vacated in the past will not be filled.
Another 12 of Harrington's 1,300 employees will have their hours cut by two to eight per week, largely through efficiency improvements in surgery scheduling, Moore said. In addition, after several years of employees receiving annual pay raises of about 2 percent, salaries have been frozen across the board, and overtime will be reduced when possible.
The hospital's new fiscal year began Oct. 1 and Moore said cuts to jobs and hours were necessary to decrease the losses Harrington will post for 2012 and expects to continue into 2013, since labor accounts for 70 percent of the nonprofit's costs. Moore said that before the decision was made to eliminate jobs, the hospital system looked at its entire cost structure to find ways to reduce costs, which included renegotiating contracts and reevaluating supply costs. In 2011, Harrington's revenues were more than $128 million.
Despite the losses, Moore said, "We still are in a very strong financial position from our balance sheet perspective. We're doing what a prudent business should do. We're trying to make sure we don't live off our reserves."
He said Harrington has $46 million in investments, "but as you would at home, you wouldn't use your retirement funds to pay for your current obligations."
Harrington is planning to open a new physician office in Spencer with a new doctor coming on staff by Feb. 1.
"As you try to control costs, you also need to keep an eye on the revenue side and the growth side," Moore said.
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