Shaky health system needs intensive care

Amid a growing financial crisis in the health-care sector, Tufts Medicine became the latest organization to announce layoffs.

Of its 13,000-person workforce, Tufts will eliminate “70 primarily administrative positions” and 170 open positions, according to the statement shared Monday with the newspaper.

As part of the Tufts system, Lowell General Hospital, along with MelroseWakefield Healthcare and Tufts Medicine Care at Home, shared the downsizing pain.

Three LGH employees not associated with patient care lost their jobs, while an additional 58 unfilled positions were eliminated, according to a hospital spokesperson. The hospital employs about 3,400 people, the spokesperson said.

No further information accompanied the announcement of the eliminated positions. However, in a statement, Tufts Medicine cited economic pressures as the catalyst for the layoffs.

“Like many health systems in the Commonwealth and across the country, Tufts Medicine has experienced significant financial challenges due to post pandemic capacity constraints, reliance on higher cost contract labor, especially in nursing, and delays in discharging patients for post-acute care,” Tufts Medicine wrote.

“While we have diligently implemented cost-controlling measures across the system, we must now make the incredibly difficult decision to reduce our workforce.”

Given its scale, Tufts, an organization that can ill afford an eroding balance sheet, sustained a far greater financial hit than any of the state’s larger health-care organizations.

The system reported a $398.6 million operating loss for the year ending in September. That figure nearly matches the record $432 million loss sustained by Mass General Brigham, the state’s largest health system, which is approximately seven times Tufts’ size when comparing revenue from patient services.

While most health systems struggled last year, Tufts appears to be on shakier financial ground than its counterparts. The Boston Globe reported that according to its most recent unaudited financial statement, Tufts could only keep paying its bills for another 85 days if it did not generate any more revenue.

Systems with healthier debt ratings keep well over 100 days of cash on hand. By comparison, Boston Children’s Hospital reported in a recent presentation that it had 729 days’ cash on hand.

Given its financial situation, there were concerns about Tufts meeting certain metrics required by bondholders over the next two years.

But the $22 million in savings these job reductions will create — along with other cost-saving measures — apparently has Tufts back on track to satisfy those debt requirements.

But what does this all mean for LGH, and by extension, Lowell’s economic well-being?

While the immediate impact of these cuts on Lowell General is minimal, given its position as the city of Lowell’s largest employer — surpassing both UMass Lowell and software company UKG, better known as Kronos — it may signal further difficult personnel decisions ahead.

That in turn could mean additional layoffs at LGH.

But the topsy-turvy condition of the state’s health-care industry — and the nation’s in general — demands that in the midst of these financial constraints, organizations like LGH continue to actively fill nursing and other clinical positions due to critical staffing shortages.

There were about 19,000 unfilled acute health care jobs in Massachusetts in October, according to a Massachusetts Health and Hospital Association study.

Positions with the highest vacancies include licensed practical nurses at 56% and pulmonary function technicians at 35%, with 40 other positions with rates in the double digits.

Another area health provider, Bridgewell, a Peabody-based nonprofit that offers services for developmental and physical disabilities, reported over 300 job openings — 25% of its organization — in May of last year.

According to the MHHA study, these workforce shortfalls leave patients with limited access to much-needed care because of hospitals’ smaller capacity. Fewer staffers also means financial cuts, fewer transportation options, crowding and employee burnout.

At the same time, competing with other hospitals to attract per-diem nurse contractors has caused wage inflation that’s also contributed to hemorrhaging bottom lines.

The MHHA called this period “the single most difficult stretch for our healthcare system across the board,” and despite relief from the state, it hopes to receive additional funding at the federal level “for the providers who have pulled our nation through the past three years.”

The COVID-19 pandemic certainly exacerbated cracks that already existed in our health-care system.

Equitable insurance reimbursements for all hospitals and continued injections of state and federal aid will be required to keep our health-care system off life support.

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