Erlanger Health System lays off 142 more workers

Erlanger Health System lays off 142 more workers

April 7th, 2012 by Mariann Martin in News

Erlanger Hospital is located on 3rd Street in Chattanooga.

Photo by Angela Lewis/Times Free Press.

COST-CUTTING MOVES


• January: Six executive positions cut, 40 percent reduction in executive ranks. Savings: $1.4 to 1.6 million

• February: 23 to 30 management positions cut, 20-25 percent reduction. Savings: About $2.5 million

• March: 142 staff positions cut, 3.5 percent reduction. Savings of about $7 million

Source: Newspaper archives, Erlanger

Erlanger Health System is laying off 142 workers as part of the third and final phase of an employee reduction plan that will save the hospital $10.5 million to $11 million a year.

The layoffs represent about 3 percent of Erlanger's 4,700 employees, according to Chief Administrative Officer Gregg Gentry.

About 55 percent of the affected employees accepted a voluntary buyout package, 25 percent of the employees had previously been placed on probation for disciplinary issues and 20 percent were involuntary layoffs, Gentry said.

"We are pleased so many employees took the voluntary separation," he said. "We wanted to make the process as easy as possible for everyone involved."

Employees taking a voluntary separation and those laid off were given four weeks of severance pay and an additional week for every year of service up to 12 weeks, Gentry said. They also have the option of purchasing health insurance at a reduced rate for up to a year.

Employees who had been placed on probation were given three weeks of severance pay, he said.

The hospital is working with the employees who took involuntary layoffs to find other jobs within the hospital.

While the positions were across Erlanger's six campuses and various departments, the majority came from support services rather than clinical care.

The hospital has not implemented a hiring freeze, Gentry noted, so positions are still being filled in some departments, particularly clinical areas.

"We were careful not to impact patient care," he said.

The layoffs allowed the hospital to reach its goal of 5.4 full-time equivalent employees per adjusted occupied bed, which is the average for a teaching hospital, Gentry said. Before beginning layoffs in January, the hospital had a 5.7 to 5.8 average.

Erlanger has struggled to return to profitability after losing more than $13 million this fiscal year.

In January, the hospital cut six executive positions , reducing its executive staff from 15 to nine, a savings of about $1.4 million to $1.6 million to the hospital.

In February, the hospital cut 23 to 30 management positions, a savings of about $2.5 million a year.

With the layoffs behind them, Gentry said the hospital will focus on stabilizing and then improving the bottom line. The hospital hopes to be back be in the black by the end of the fiscal year.

Doctors had migrated to other hospitals under the tenure of former CEO Jim Brexler. Hospital officials have said they have reached out to doctors and are addressing the reasons they left, but surgeries at the hospital have not yet returned to previous levels.