Grace Cottage Hospital cuts staff, cites Affordable Care Act
By Susan Smallheer
Staff Writer | February 22,2013
TOWNSHEND — Grace Cottage Hospital, the state’s smallest hospital, announced it is cutting its workforce by 10 percent because of budget pressures brought on partly by the Affordable Care Act.
The layoffs, the first at the hospital since 2002 when the hospital closed its nursing home, will affect 15 employees in eight different departments, according to Andrea Seaton, vice president of planning and development.
Seaton said there would be no cuts in the services at the hospital, which serves the West River Valley. The hospital has 154 employees.
“The reduction in staff has been planned so that our high quality of patient care will not be impacted,” said Deborah Boyle, chairwoman of the Grace Cottage Hospital Board of Trustees. “We are sorry that the employees affected by this reduction will no longer be with us. We appreciate their important contributions to Grace Cottage and to our patients during their employment here.”
Seaton said the hospital, which has a $24 million annual budget for the hospital and its health clinic, had seen flat revenues in the past year. The hospital budget alone represents $18 million, she said. The hospital, which is licensed for 19 beds, has also seen a decline in utilization, with 14 to 15 beds on average being used.
The hospital and clinic provided more than $1 million in free care last year, she said.
Seaton said the hospital serves an increasingly elderly population, and she noted that Vermont is second only to Maine for the oldest population. She said the West River Valley population was also increasingly elderly, and the hospital’s revenue source comes from Medicare primarily.
Grace Cottage joins most Vermont hospitals in announcing layoffs or cutbacks in the past year or so, Seaton said. There have been cutbacks at Brattleboro Memorial Hospital, the Brattleboro Retreat, Dartmouth-Hitchcock Medical Center and Rutland Regional Medical Center, she said.
Grace Cottage has focused on rehabilitation medicine, she said, and in general the hospital sees shorter patient stays, with patients receiving rehabilitation services twice a day. “Our patients get out quicker, but our cost per patient per day is higher,” she said.
Seaton said the employees, who ranged from long-term employees to more recent hires, would receive a severance package. She declined to say what that package was.
Seaton said Grace Cottage’s current budget had gone up 6.5 percent, and had been approved by the Green Mountain Care Board.
She said that two recent improvement projects at the hospital — the move to electronic health records and expansion of the hospital’s retail pharmacy — did not have an effect on the budget pressures that led to the layoffs.
She said the hospital had applied for $2 million in federal grants from the American Recovery and Reinvestment Act in 2009 to pay for the electronic health records system, and the Messenger Valley Pharmacy expansion was also funded through grants and restricted donations.