The three unions at Lawrence + Memorial Hospital are accusing the hospital corporation of saying there is a “lack of funds for supplies and staff” while also making presentations about its fiscal stability as it moves to acquire Westerly Hospital.
The unions are protesting cutbacks being made at L+M, including layoffs and reduced hours. In a joint statement, union representatives said workers should not be making such sacrifices if the hospital is solvent enough to make such capital purchases. Part of the Westerly agreement includes the retention of clinical, support, and trades staff at Westerly, with the explanation that the acquisition should be mutually beneficial for the employees at both L+M and Westerly.
"I'm troubled by the fact L+M has committed to maintaining staff at Westerly while they are laying off staff here," said Stephanie Johnson, president of L+M LPN/Techs Local 5051.
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Michael O’Farrell, spokesman for L+M, said the corporation has a history of fiscally sound budgets but that these sometimes require difficult decisions. He said the corporation is financially stable at present but has to do what it thinks will be necessary to remain so in the future.
“There’s never been an assertion that the hospital or the corporation is financially unstable,” he said. “That’s a misleading statement.”
L+M is proceeding with a $69 million acquisition of Westerly Hospital, which filed for receivership in December 2011. The bid approved in August includes a five-year, $30 million capital improvement plan; assumption of Westerly Hospital's $22 million in debt; and $6.5 million in capital funds.
The bid’s approval came two months after L+M’s decision to discontinue its sports medicine program after determining it was unsustainable. In November, the hospital laid off 22 employees to close a $3.2 million budget gap in the current fiscal year.
O’Farrell said hospitals are under stress from a number of factors, including changes in payment models and regulations, cuts programmed into the Affordable Care Act, reductions in Medicare and Medicaid payments, and possible cuts in state funding under Gov. Dannel Malloy’s budget. He said the corporation is constantly adapting to such changes and working toward providing the best care for patients at the lowest cost.
“The whole Westerly situation is part of that notion of creating stability for the future,” O’Farrell said. “We know the worst thing we can do is sit back and wait for things to happen. We’ve got to invest in the cancer center. We’ve got to invest in Westerly. We’ve got to invest in new programs and services.”
Harry Rodriguez, president of L&M Healthcare Workers Union Local 5123, said L+M’s recent presentation to Rhode Island officials shows that the corporation has A+ credit ratings from Standard and Poor and from Fitch, 200 days of cash on hand, "in excess of $200 million in unrestricted investments," and $50 million in other investments.
"Last November 22 hospital employees were laid off because the hospital was supposedly financially unstable," said Rodriguez. "Now we see that the hospital is more than financially stable. They owe our workers an explanation."
Lisa D'Abrosca, president of L&M RNs Local 5049, said the presentation shows that L+M’s “solid financial standing is second to only one other hospital in the state.”
O’Farrell confirmed the unions’ statement that since the November layoffs, 22 additional employees have been laid off or had hours reduced. He said it was about evenly split between layoffs and reduced hours and primarily affected food services and occupational health employees.
At the annual meeting of the L+M Corporation on Dec. 12, the corporation announced that it intends to spend $79.4 million on capital projects in the 2013 fiscal year. These include $23 million toward the new Dana Farber cancer center in Waterford, expected to open in September, as well as $21.5 million toward the acquisition of the Westerly Hospital assets, $12 million for equipment upgrades, and $6.9 million for renovations at a Howard Street building purchased last year for medical offices.
Bruce Cummings, the L+M president and CEO, said at that meeting that the corporation’s investments in infrastructure are a way to prepare for the future and address changes in health care. Cummings said more patients currently require outpatient care than inpatient care.