Mil­ford Hospi­tal slashes em­ployee pay to stay sol­vent

Connecticut Post - - FRONT PAGE - By Luther Turmelle

MIL­FORD — Mil­ford Hospi­tal of­fi­cials have in­sti­tuted a se­ries of deep bud­get cuts in an ef­fort to re­main fi­nan­cially sol­vent.

Of­fi­cials are in the midst of ne­go­ti­a­tions with ex­ec­u­tives at Bridge­port Hospi­tal and Yale New Haven Health to ac­quire the New Haven County health care fa­cil­ity. The par­ties an­nounced last month they had signed an as­set pur­chase agree­ment.

A deal to in­te­grate Mil­ford Hospi­tal with its Bridge­port coun­ter­part re­quires the ap­proval of two state reg­u­la­tory agen­cies, the Depart­ment of Pub­lic Health and the Of­fice of Health Strat­egy. One rea­son the cuts are nec­es­sary is to keep Mil­ford Hospi­tal sol­vent un­til the deal can be ap­proved, ac­cord­ing to Karen Kipfer, a spokes­woman.

“These kinds of ap­provals can take any where from nine to 12 months,” Kipfer said. “The hospi­tal has faced fi­nan­cial chal­lenges long be­fore this and

these changes were needed to en­sure our fi­nan­cial sta­bil­ity un­til reg­u­la­tors rule on this. Our goal is to avoid bank­ruptcy and clo­sure.”

The cuts also would al­low Mil­ford Hospi­tal to be­come a more at­trac­tive merger part­ner, she said. The bud­get cuts in­clude: In­cre­men­tal wage cuts to em­ploy­ees mak­ing more than $50,000 per year. The cuts range from 5 per­cent to 30 per­cent of an em­ployee’s wages, de­pend­ing upon what they are mak­ing and their job ti­tle.

The hospi­tal on July 1 ceased mak­ing match­ing con­tri­bu­tions to em­ploy­ees’ 403(b) re­tire­ment plans. The plans, also known as tax shel­tered an­nu­ities, are for cer­tain em­ploy­ees of pub­lic schools and other tax-ex­empt or­ga­ni­za­tions.

Cuts to ex­cess ac­cu­mu­lated va­ca­tion time.

Of­fer­ing set­tle­ments to con­trac­tors who per­formed work for the hospi­tal prior to Aug. 1 that would al­low the hospi­tal to pay less than what it owes.

One busi­ness­man, who spoke to Hearst Con­necti­cut Me­dia on con­di­tion his com­pany not be iden­ti­fied, said he was of­fered 20 cents on the dol­lar for work the busi­ness did for the hospi­tal.

Vin­cent Petrini, se­nior vice pres­i­dent of pub­lic af­fairs for Yale New Haven Health, said Mil­ford Hospi­tal of­fi­cials made the de­ci­sions on their own re­gard­ing the cost-cut­ting mea­sures.

“Un­til the trans­ac­tion is ap­proved by reg­u­la­tors and closes, the or­ga­ni­za­tions con­tinue to act as sep­a­rate or­ga­ni­za­tions,” Petrini said. “The trans­ac­tion, if ap­proved, does have Bridge­port Hospi­tal as­sum­ing sig­nif­i­cant debt, in­clud­ing loans, mort­gages and more than $30 mil­lion in pen­sion li­a­bil­i­ties associated with Mil­ford Hospi­tal.”

If Mil­ford Hospi­tal were to go into bank­ruptcy, Yale New Haven Health could ac­quire it at a much lower cost. But Petrini said the pro­posed ap­proach cur­rently in place “pro­vides greater sta­bil­ity for em­ploy­ees and pa­tients alike.”

“Our goal is to sus­tain ac­cess to high-qual­ity care with the least amount of dis­rup­tion as pos­si­ble,” he said.

Mil­ford Hospi­tal has more than 600 em­ploy­ees when full- and part-time workers and those em­ployed on a per diem ba­sis are in­cluded, Kipfer said. There are 400 full-time equiv­a­lent em­ploy­ees and, of that to­tal, about 100 are rep­re­sented by a union, she said.

“The sacri­fice and sup­port of our em­ploy­ees has been noth­ing short of amaz­ing,” Kipfer said, adding that union of­fi­cials had signed off on the cuts.

Mil­ford Hospi­tal’s board of di­rec­tors appointed an in­de­pen­dent man­age­ment and ad­vi­sory firm, Toney- Korf Part­ners LLC, to de­velop a plan that would sus­tain the op­er­a­tions of the hospi­tal as it con­sid­ered longterm op­tions, in­clud­ing the po­ten­tial in­te­gra­tion with Bridge­port Hospi­tal. Rep­re­sen­ta­tives with ToneyKorf Part­ners have been con­tact­ing con­trac­tors about set­tle­ments that would leave the com­pa­nies with pen­nies of the dol­lar of the to­tal amount they are owed.

Mil­ford Hospi­tal al­ready had a pre-ex­ist­ing busi­ness ar­range­ment with Yale New Haven Health and Bridge­port Hospi­tal.

The three par­ties de­vel­oped a col­lab­o­ra­tive re­la­tion­ship in which both Yale New Haven Hospi­tal and Bridge­port Hospi­tal agreed to house their re­spec­tive In­pa­tient Re­ha­bil­i­ta­tion Units with Mil­ford Hospi­tal.

How­ever, the ar­range­ment failed to solve Mil­ford Hospi­tal’s need for a dif­fer­ent busi­ness model. Hospi­tal of­fi­cials said last month that the fa­cil­ity’s fi­nan­cial per­for­mance con­tin­ued to be chal­lenged by low re­im­burse­ment rates from gov­ern­ment pay­ers.

An­gela Mat­tie, a pro­fes­sor and depart­ment chair­woman of Quin­nip­iac Univer­sity’s Health­care Man­age­ment and Or­ga­ni­za­tional Lead­er­ship pro­gram, said Mil­ford Hospi­tal’s sit­u­a­tion is be­com­ing an in­creas­ingly com­mon one for com­mu­nity hos­pi­tals..

“Peo­ple get very in­vested in their com­mu­nity hos­pi­tals.” Mat­tie said. “It’s like a part of their ex­tended fam­ily. But the stand­alone fam­ily hospi­tal is no longer fi­nan­cially vi­able.”

Given the choice be­tween hav­ing Mil­ford Hospi­tal no longer ex­ist or hav­ing it af­fil­i­ate with a larger health care sys­tem, Mat­tie said “most peo­ple are go­ing to opt for do­ing what it takes to have a bricks-and-mor­tar hospi­tal re­main in their com­mu­nity.”

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