FAHC lays off 50 employees in cost cutting effort

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(Host) Vermont’s largest hospital will cut 50 jobs and trim physician salaries in order to reverse an eight million dollar operating loss. The sweeping cost-cuts at Fletcher Allen Health Care in Burlington were announced on Thursday by interim President Edwin Colodny.

VPR’s John Dillon has more:

(Dillon) Colodny is a former airline executive who in his previous career had to oversee massive layoffs. He says it’s never easy to fire people.

(Colodny) “There’s no way to tell somebody whose job has been eliminated that it’s not 100% painful.”

(Dillon) Other cost-saving measures include a cut in travel and salary for administrators and doctors. For managers, the pay cuts will range from 3-15%. These measures are expected to save about two million dollars in the next fiscal year.

And in addition to the 50 people who will lose their jobs, the hospital will leave 78 positions unfilled. Fletcher Allen says this should save roughly $2.5 million. Colodny says patient care will not be compromised:

(Colodny) “I can’t say there’ll be no impact, but a lot of these are positions are not patient care. Most of them do not have anything to do with patient care at all. There are a lot of areas of activity where the patient would have no involvement. Just to use an extreme – our mailroom – where we have reduced a couple of positions.”

(Dillon) The hospital also plans to improve revenues by expanding radiology and other services to meet patient demand.

Fletcher Allen is in the middle of a huge construction project whose cost ballooned from $173 million to more than $350 million in the last year. Colodny says the recent financial troubles are not due to the cost of the hospital expansion. He says the Renaissance Project is funded through loans, not operating revenue.

(Colodny) “Almost all of the cost of the Renaissance Project is capital cost being capitalized. Those expenses are not in our operating budget.”

(Dillon) Fletcher Allen employs about 6,000 people. It recently reported an operating loss of $8.4 million in the first six months of the fiscal year.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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