Bassett lays off 100 employees to reduce budget deficit
Lauren Takores, The Daily Star, Oneonta, N.Y.
5 min read
Oct. 18—Bassett Healthcare Network laid off around 100 employees this week across its hospitals and health care facilities by eliminating their positions.
Bassett President and CEO Staci Thompson said Friday, Oct. 18 the affected roles, representing about 2% of its workforce, were primarily administrative.
The layoff affected both newer and longtime employees. No direct bedside caregivers were impacted. About one quarter of the laid-off employees were remote workers, many of whom did not live in New York, she said.
"We made adjustments within our executive leadership team, as well as within our vice president level," Thompson said.
Thompson said the layoff has been completed.
"We have sent communications out to the rest of the organization, just clarifying that there aren't additional widespread cuts to be made," she said.
Financial challenges
Thompson said the layoffs were driven by significant financial losses — about $80 million in 2022, a similar amount in 2023, and losses are projected for this year as well.
Bassett executives were guided by recommendations from Huron Healthcare Consultants. Since April, Bassett and Huron had been focused on overall workforce improvements, aiming to achieve cost reductions through a mix of revenue-generating ideas and expense-targeting ideas.
In addition to workforce, they explored improving length of patient stay, the supply chain, the medical group practice and productivity, pharmacy, coding, facilities, charge capture and human resources.
"Almost 70% of our organizational expenses, as a percent of our net revenue, are related to salaries and wages," Thompson said. "That's why (the workforce) is certainly one that gets the most attention."
Of the $80 million needed for Bassett to achieve a break-even status, about a third is coming overall from workforce changes, including attrition and reduction of agency workers. The majority of the rest of the savings is coming from the other areas.
"Our plan is to leave no stone unturned ... looking at opportunities so that we could minimize the disruptions to our workforce," Thompson said.
What's contributing most to Bassett's ongoing operational deficits is reduced government reimbursements. In addition, one-time COVID-19-related FEMA money that Bassett received has run out.
About 70% of Bassett's business comes from governmental payers, mainly Medicare and Medicaid. For rural health care organizations like Bassett that depend on larger shares of governmental payer mix, there is more of a loss.
"When you look across New York state, 83% of rural organizations are losing money," Thompson said, "and when you look across the rest of the country, you've got about over 50% losing money. Working in New York state is difficult in terms of reimbursement overall."
General price inflation and wage inflation post-COVID also has exacerbated Bassett's losses, she said.
Layoff process
Bassett informed employees of the layoffs largely on Wednesday. Laid-off employees were provided with severance options, with some employees choosing to stay. Thompson said she didn't know how many of the affected employees opted to stay at Bassett.
"Those employees are working with our human resources office ... and being fast tracked into interviews for other positions," she said.
The layoff process emphasized empathy, Thompson said, but one employee who was laid off this week said that was not their experience.
An employee that was in a leadership position and took the severance spoke to The Daily Star on the condition of anonymity. Their severance package included an non-disclosure agreement barring them from disparaging Bassett publicly.
Bassett presented the employee with the options of taking a pay cut or accepting a severance package. They described the Bassett staff that handed down the options as "heartless and stone cold" in the meeting.
They also observed employees affected by the layoffs being escorted around by security.
"My coworkers are absolutely devastated," they said. "It's infuriating."
Thompson said that the NDAs were a standard organizational practice used across the country.
She added that employees who were laid off were told by their direct supervisor and a representative from human resources.
"As difficult as this is for our employee base, we're really trying to help people to the best we could, and part of that helped is giving them choices. Not everybody will choose to stay with the organization in a different role, and that's why you offer a severance agreement for people," she said.
She also denied that security escorted people out.
"Security would have only been utilized ... in the event there was any disruption," she said. "In the reports that I got, things were very orderly, people were calm."
"You have to balance the fact that we have patient care going on with the with the decisions that were made," Thompson added. "We were in the middle of a work day. There were no direct patient care workers involved in these reductions ... We just wanted to be respectful of both the employee and the normal business operations as they occur."
The future focus is on growth and financial sustainability. The layoffs were proactive, a way to "own our future, as opposed to having our future determined for us by another party," Thompson said.
"We are still recruiting and will continue to recruit a number of different positions across the network, but we're looking still at recruiting clinical positions," she said. "We have 520 practitioners, and we're recruiting. We'll continue to be an organization that serves our community, takes care of our patients, and we're going to ensure that we're around for a long time to come."
On the business side, the goal is to avoid another widespread positions reduction.
"It is not something that anybody likes to do," Thompson said. "We're determined as a team, as an organization, that we don't have to do this going forward. For us, it's about looking forward and continuing to grow and to be healthy."
