The Dartmouth-Hitchcock Health system in New Hampshire will lay off 3 percent to 5 percent of its workforce this year in response to ongoing financial problems.
The layoffs could affect the whole hospital system, not just the flagship hospital in Lebanon, spokesperson Rick Adams said. The system employs about 9,200 people, meaning that anywhere from 275 to 460 could be laid off by the end of the year.
The hospital says it will have more information about the layoffs in mid-October. Dartmouth will formally eliminate positions later in the calendar year and will consider staff reductions at "all levels" of the organization.
James Weinstein, the chief executive officer of the hospital and health system, told his staff about the layoffs in a memo Friday in which he expressed "deep personal sadness." He also described the reasons that the flagship hospital ran a $12.2 million deficit in the fiscal year that ended June 30.
Weinstein said the hospital overestimated revenues for fiscal year 2016 by $40 million and saw $115 million in unexpected expenses because of "new business systems, revenue management services and the associated labor, and travelers, supplies, and pharmaceutical cost, to name a few."
He said the company now must come up with ways to cut $100 million from its operating budget. Some of that could take the form of clinical efficiencies, but he said cutting personnel is an "inescapable" reality. Staff costs represent 64 percent of the hospital's expenses.
Dartmouth has also been suing the state of Vermont and the federal government, saying that Vermont's Medicaid program has been paying it $11 million less than the UVM Medical Center would make for the same services. That trial is not scheduled until 2017, according to court documents.
The health system's flagship hospital in Lebanon gets about 40 percent of its patients from Vermont. The system is also affiliated with Mt. Ascutney Hospital and Health Center in Windsor.
The system formed an affiliation in June with the Visiting Nurse and Hospice of Vermont and New Hampshire and has been broadening its partnership with Southwestern Vermont Medical Center in Bennington.
"In addition to the employee reductions, we are undertaking a thorough review of our clinical programs," Weinstein wrote. "Services will be evaluated, not just through the lens of whether they are financially beneficial, but also in terms of how they contribute to our patient care, research, and education missions," he wrote."
"This review will be done very carefully, very thoughtfully, with input from a wide range of colleagues," he wrote. "Our decisions will be made in the context of our population health and value-based care mission, with the needs of our patients always being top of mind."