UPDATE: Springfield Medical Care Systems, Inc., Springfield Hospital Announce Details of Restructuring Plans

Wage Adjustments, Reduction of Positions Included

SPRINGFIELD, VT–– Springfield Medical Care Systems, Inc. (SMCS), and Springfield Hospital today, Friday, announced a restructuring of its operations to reduce expenses and improve the organization’s financial performance. The restructuring, which is part of a broader plan to ensure ongoing access to quality healthcare services in the region, includes the elimination of positions and system-wide wage adjustments to better align the system’s workforce and costs to current market demand.

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 “These decisions are incredibly difficult, and we have worked hard to limit staffing reductions as we begin the turnaround necessary to stabilize this organization so that we can provide great care now and in the future,” said George Lamb, Chairman of the Board for SMCS. 

“Though we know these changes are necessary, we deeply regret the personal impact of this reduction. We are grateful to the state, our community and the staff for their ongoing support as we manage through this challenge.” 

Like so many rural hospitals and health systems throughout the country, SMCS and Springfield Hospital are faced with significant financial challenges. To move forward, the organization must reduce $6.5 million in annual costs to be implemented as quickly and efficiently as possible. 

This work requires SMCS and Springfield Hospital to consider every option available. Staffing and wage reductions are an initial step of this overall plan. The remaining items such as renegotiated vendor contracts, and other organizational changes, are in development and will be shared in the coming days and weeks. 

“Approximately 27 positions will be eliminated - which represent less than six percent of the total workforce – and are spread throughout the organization, with careful consideration of patient care needs and to minimize the impact on any one area. Addressing staffing costs is an important first step since staffing represents 44% of our overall costs,” said a spokesperson.

 System-wide wage reductions will take effect February 24, 2019, and include 10% for salaried positions, 4% for hourly staff, and a negotiated amount from contracted staff.

 These adjustments align staffing to the organizations’ current activity levels. “To be clear, the situation is fluid, and it is possible further staffing adjustments will be necessary,” said the spokesperson. “The need to identify further cost savings remains.”

 Cecil Beehler, MD, Chief Medical Officer, added, “There is no denying this is a very challenging time for us. SMCS and Springfield Hospital play a critical role in our region - providing lifesaving care and improving overall health through prevention, wellness and population health efforts. Our patients’ health and well-being remain at the center of everything we do as we continue this difficult, but necessary, journey.” 

As part of a broader strategic review, individual service lines are being carefully analyzed to determine market demand and sustainability. As part of this analysis, options for further collaboration and affiliation with Dartmouth Hitchcock are being discussed to enhance the availability of needed health care services for residents of our region. 

Additionally, under guidance of counsel, Chapter 11 reorganization is also being considered as a possibility to help stabilize the situation so services can continue into the future.

 Lamb also stated the Boards are continuing to work closely with the Governor’s office, including Tom Huebner, and the state and federal congressional delegation to explore every available opportunity to improve the organization’s current situation. “The healthcare environment is rapidly evolving, creating challenges and opportunities in how we serve our communities. Our Board fully recognizes the need to take immediate action to realign expenses and to develop a sustainable model for the future,” he added.

   The Valley News reported that SMCS "has received a $1.6 million advance, half from the Vermont Agency of Human Services and the other half from Berkshire Bank, in order to keep the operation running." 

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