Freeze on wages at Sharon Hospital

SHARON — On Jan. 18, Sharon Hospital President and CEO Kimberly Lumia informed employees that unknowns resulting from the ‘“fiscal cliff’ and state of Connecticut budget cuts necessitated a temporary freeze on any merit pay increases for all employees.In a meeting with The Lakeville Journal, Lumia, Chief Financial Officer Mark Reyngoudt and Jill Groody Musselman, the hospital’s business development and communications officer, stressed it was the unknowns resulting from the state and federal economic struggles that forced the hospital to take a close look at ways to keep costs down.Reyngoudt said, “the hospital is financially stable and is making a modest profit.” He added that,“We are meeting the needs of the community in an efficient manner.”But, he said, “The state of Connecticut is cutting reimbursements to hospitals by $100 million.”Sharon Hospital is one of three hospitals in the state that is getting hit particularly hard by the cut. Reyngoudt explained these reimbursements are to help hospitals cover the costs of treating patients who can not pay for services but that the hospital is required to treat.Last year, Sharon Hospital was also hit with a state provider tax of $2.2 million. Reyngoudt said, “The more the state reimburses hospitals, the more it receives in Medicaid assistance from the U.S. government.” That was the thinking behind the ‘provider tax’ in which hospitals and nursing home providers are charged a tax on each bed per night. The state then in theory repays that tax to providers with a slight profit. The CFO said, “Sharon Hospital was one of three hospitals in the state that did not benefit from this scheme. As a result, we had to cut 26 FTE [full-time equivalent jobs] last year.” Because of state budget challenges, the state will not be making a rebate payment, due in May 2013. That will cost Sharon Hospital $411,000.According to Reyngoudt, the Affordable Care Act (a/k/a Obamacare) does not pay for itself, “Even the Congressional Budget Office predicted it will generate a high deficit.”With an uncertain nationwide financial future, Reyngoudt said Sharon Hospital has to be careful with its budget.However, one area in which spending continues is capital projects designed to improve and expand patient care. Sharon Hospital is spending $2.1 million on a new 64 slice CT scanner. The scanners make multiple images (or slices) through a patients’s body. Older machines made eight, 16 or 32 slices (the machine now in use in Sharon makes eight slices). The new machine will make 64 slices, providing radiologists with more detailed images to evaluate. Reyngoudt also said the new machine will also emit lower doses of radiation than the older machines.“We want to provide patient services, we do not want to cut jobs,” Reyngoudt said. “That was why we decided it would be better to temporarily forego merit pay increases, rather than skimp on patient care and services.” The hospital has 78 beds, including 12 which are in an acute bed locked psychiatric unit, primarily for seniors with mental challenges such as dementia. Lumia agreed that the goal of a freeze is to allow the hospital to keep its full staff and not lay anyone off.“Our goal is not to reduce the work force,” she said. Sharon Hospital currently has 283 full-time equivalent employees, including full-time and part-time staff.Sharon was the first for-profit hospital in the state. It is now owned by Regional Health Care Partners, which Lumia said is profitable. “Each of the seven hospitals that are part of the group carries its own weight,” she said. In addition to sending a letter to all employees, Lumia said meetings are being held with staff to explain the temporary merit pay freeze.Sharon Hospital has a governing board and an advisory board. The hospital recently announced two new members of the Governing Board: Howard Fuhr and Rusty Chandler. Ralph Fidele was newly named to the Advisory Board.