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Saint Clare's Announces Cost Savings Plan


01/28/2009

Actions Ensure Continued Community Healthcare Services

Saint Clare’s Health System announced today that due to the financial challenges that accompany the state’s economic and healthcare crisis, the organization is implementing a comprehensive financial improvement plan that will include a workforce reduction and a variety of other expense reduction measures. These changes are necessary to ensure the future success of Saint Clare’s, and the continuation of its healthcare ministry.

"After much deliberation, we’ve had to make some difficult decisions and changes to improve our financial health. It’s no secret that many industries are feeling the strain of the country’s current economic downturn. This is especially true for hospitals across the country, but even more so for hospitals in New Jersey," said Saint Clare’s Health System President and CEO Les Hirsch. "We lack adequate public funding for charity care and other government sponsored programs such as Medicare and Medicaid. This year the state budget removed over $120 million in charity care and other hospital funding. Saint Clare’s share of these funding cuts was $3.2 million."

Consequently, every facet of Saint Clare’s operations is being scrutinized to determine how best to reduce cost and increase revenue. A number of opportunities have already been identified and plans for the future are being developed.

Of Saint Clare’s 3,500 employees approximately 180 full time positions will be eliminated. This will be accomplished through attrition, productivity improvements and approximately 100 layoffs that are occurring today. These reductions will not have a direct impact on patient care. Affected employees will receive separation packages, based on years of service and employment status. Transition assistance will also be provided to impacted employees.

"We have served this community for more than 100 years, and while staff reduction is always a painful last resort, the current circumstances offer no alternative. For years hospitals in New Jersey have struggled financially due to the lack of adequate funding and that struggle continues today as more than half are losing money." said Hirsch. "We remain committed to providing excellent care and are proud of the outstanding work of all our employees. Our staff is to be commended for their dedication to Saint Clare’s, and to this community."

The New Jersey Commission on Rationalizing Health Care Resources, created by Governor Jon Corzine in 2006, found that New Jersey hospitals are part of a dynamic healthcare delivery system that is impacted by external forces that are outside of an individual hospital’s control. Although this report validates the underfunding of New Jersey’s healthcare system, to date, there has been no real change in funding levels.

"We are committed to working with local, state, and national leaders to find a solution to the healthcare crisis both in New Jersey and across the country," concluded Hirsch. "In anticipation of President Obama’s proposal for healthcare reform, it is important that we work together to ensure that the health and well-being of our citizens are protected."

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