In order to ensure that patient care is not compromised, only about 100 employees who accepted their offers left their jobs on Friday. The remaining individuals will gradually leave their positions over the next several months, Adams said.
DHMC extended offers to employees at all levels whose age plus years of service added up to 80 or more, Adams said. Employees who treat patients directly and a small number of "very specialized administrative positions" did not receive offers, he said.
The retirement package offered is comparable to an "enhanced pension benefit," Adams said. The retirees could accept the pension as a lifetime annuity or as a lump sum payment. All employees who accepted the offer will receive an additional payment equivalent to six to nine months of base pay depending on their age and years of employment, and will also receive medical coverage at the "active employee rate" through the end of 2013, Adams said.
DHMC employs approximately 8,700 workers, but only about 8 percent of the workforce was eligible for the retirement plan, according to Adams. Just 3 percent of the overall workforce accepted the offer, he said.
DHMC's $100 million deficit resulted from the combined impact of New Hampshire state budget cuts enacted on July 1 and prior reductions in hospitals' Medicaid reimbursement rates over the past three years. DHMC and nine other New Hampshire hospitals filed a lawsuit against the state on July 25 in which they alleged that reductions to Medicaid reimbursement rates violate the Medicaid Act. Through the lawsuit, the hospitals hope to reverse the changes to the state's 2012-2013 fiscal year budget.
The hospital is currently evaluating additional measures it may take to address the remaining deficit, according to Adams.
"It depends whether [the employees] choose the lump sum or the annuity," Adams said. "We're looking at how our workforce is constructed, at vacant positions, discretionary spending, travel and all of our operations. Everything is on the table."
Adams said he was unsure exactly how much money the departures will save DHMC. The plan was initially expected to save between $5 million and $25 million.
Staff layoffs remain a possibility as DHMC seeks to further reduce costs, DHMC Chief Human Resources Officer Alan Weston said in an interview with the Valley News. Adams, however, emphasized that layoffs will be the "absolute last resort."
Weston did not return requests for comment by press time.
DHMC's main priority remains the quality of patient care, and the hospital is actively preparing to fill any gaps that might arise due to retirements, Adams said.
"We've known that this deficit was coming," Adams said. "All hospitals are facing this problem of the decline in federal funding while continuing to deliver care at a lower cost."
Employees who were offered the retirement option but declined will continue to work at DHMC, he said.
Frank McDougall, vice president of government affairs at DHMC, could not be reached for comment by press time.
