BRISTOL — Bristol Health President & CEO Kurt Barwis said the system is going to lay off and cut back 60 full time equivalent positions amid increasing costs and funding challenges that caused them to lose about $30 million over the last two years.
Barwis said that the layoffs were “extremely difficult and painful to make,” but will save the system $14 million a year. The layoffs and cuts include eliminating 19 full time and 27 part time positions, as well as six open positions. Overtime hours were reduced by $756,000, and another $1.37 million in “efficiencies” were implemented, impacting 22 positions, according to Barwis.
Barwis also said members of the hospital’s executive team took a voluntary 6% reduction in salary to cover the $1.8 million cost of merit pay increases. There were also $976,615 in non-labor expense reductions, and about $9.9 million saved through revenue cycle management, Barwis said.
“[The cuts] were made after careful consideration of alternatives and with the best interest of our patients and the community we serve,” he said. “It is important to note that these changes did not include any reduction in core services nor will they impact the safety or quality of the services we provide.”
Barwis said the hospital’s finances have been improving since it posted a $21.8 million operating loss in fiscal year 2023. Last year, it posted an “approximate $8.5 to $9 million” operating loss – a 58.76% improvement from the year before. And for the first five months of this fiscal year, the system posted a positive $637,017 operating margin, he said.
Despite Bristol Health now having “consistently” positive margins, Barwis said the system is still facing “negative headwinds and harsh realities” that are impacting hospitals across the state.
A report on the finances of short-term acute care hospitals in the state from the Connecticut Office of Health Strategy highlighted “inflationary impacts” they faced in fiscal year 2023, including a 29% increase in salaries and wages, a 33% increase in the cost of drugs and supplies, and a 2.79% increase in unpaid care, Barwis said.
At the same time, he said hospitals and health care systems saw “little to no” offsetting increases in reimbursement rates. This resulted in a statewide operating loss of $75.53 million in 2023.
Barwis said Bristol Health and other hospitals are suffering from Medicare Advantage abuse, which results in hospitals like Bristol Health receiving 11 to 12% less reimbursement than traditional Medicare by adding administrative burdens and increasing denials.
He said Connecticut has also underinvested in its Medicaid programs, and that Connecticut Medicaid underpaid more than $1.4 billion in 2023. And he said that, despite being a non-profit, tax-exempt 501(c)3 organization, Bristol Health has accrued an average of $3.3 million in Connecticut taxes a year.
“[The Hospital Provider Tax] program that was implemented by the prior state administration with approximately $800 million of the taxes paid by hospitals currently being used for other than hospital funding,” Barwis said. “While State of CT grants to Bristol Health have gratefully offset these taxes in the recent past, there will be no grants in the future.”
Barwis said the system’s turnaround to posting a positive margin so far this year is “thanks to the incredible work, dedication and diligence of the Bristol Health team.” He said Bristol Health has come far despite “how challenging the needed changes have been,” and that none of those changes compromised patient care.
“Our unwavering commitment to our community, to providing the highest quality, safest care, and sustaining our Mission will always be central to the decisions we make each day,” Barwis said.
Barwis said that Bristol Health is “unique” in that it remains a “standalone small system anchored by an outstanding acute care hospital.”
“Our value to the community extends well beyond the care and access we provide,” he said.
Barwis said that all one needs to do is drive through downtown Bristol to understand the “economic power and benefit” derived from Bristol Health.
“With limited resources Bristol Health sparked the development of a 17 acre property across from City Hall that had been vacant since 2008 with its investment in a new 60,000 square foot medical center on the property,” he said. “Today the entire property is redeveloped and vibrant.”
He said Bristol Health has learned the value of its independence from when it entered into an agreement in 2012 and 2013 to join a larger system that included the current Prospect Medical Holdings hospitals in Connecticut – some of which are now in bankruptcy.
“We learned from that process and grew stronger as the reality of being part of a system faded.”
Now as a standalone, Barwis said, Bristol Health has “frequently and successfully” navigated difficult times.
“What we are facing and what we must do now to overcome adversity is no different from the past,” he said. “We will retain and fortify our unique identity and culture. We will continue to deliver extraordinary quality and safety. Expect all of these things to be true today, tomorrow, next week and well into the future.”
