Waterbury Hospital to Lay Off 75 Workers

Waterbury Hospital is laying off 75 people and eliminating 20 open positions, the regional hospital announced via a press release on Tuesday, Feb. 21.

The workforce reduction amounts to 5 percent of Waterbury Hospital’s 1,700 employees, according to the press release. In addition to the cuts, 15 employees will see their hours reduced.

The layoffs are effective immediately.

Notices were sent out on Monday and will continue on Tuesday, "with a goal of helping all impacted employees land on their feet," the release stated.

"This is a sad day for our organization," said hospital President/CEO Darlene Stromstad, FACHE, according to the press release. "This is a significant reduction. I am asking all local businesses that are hiring to please consider our employees."

Stromstad reassured that the care for patients wouldn’t be disrupted by these layoffs. The reduction includes 22 management level positions, as well as educators, clerical and support staff and union and nonunion individuals.

Waterbury Hospital said it expects to save approximately $4.4 million through the cuts.

The hospital is one of the main medical facilities in the region and, apart from serving Waterbury residents, also serves neighboring communities including Middlebury, Naugatuck, Southbury, Woodbury, Wolcott, Cheshire and other towns.

The hospital recently announced its intention to become a for-profit entity after Texas-based LHP Hospital Group said it planned on purchasing the hospital. The change in structure is currently pending as state regulatory agencies review the proposal, said Matt Burgard, Waterbury Hospital spokesman.

LHP also announced it's plan to merge with St. Mary’s Hospital — where LHP would own 80 percent in the venture and St. Mary’s would own the remaining 20 percent — and just last summer the hospitals signed a letter of intent tobuild a single new replacement hospital in Waterbury. This is also being reviewed by the state.

The new facility is expected to cost $400 million.

In the press release, Stromstad said while the process to merge continues to be on track, the hospital still needs to run its daily operations.

"The opportunity for a replacement hospital in Waterbury is a once in a lifetime opportunity," Stromstad said, "and we are all very motivated and optimistic. That said, today we remain an independent hospital and we must run ourselves that way."

Waterbury Hospital ended its last fiscal year with an almost $10 million loss, and has suffered a $34 million loss over the past four years, the hospital said, and during present fiscal year, expenses have not flexed down in balance with decreases in revenues.

"The crux of this issue is decreasing reimbursement, increasing costs and the impact of a soft economy," Stromstad said. 

She said the hospital has escalating costs in supplies, equipment and labor and increasing regulatory costs without the ability to increase its reimbursement per unit of service. 

"Almost 70 percent of our patients are covered by a governmental payer which doesn’t negotiate payment," said Stromstad. It’s fixed."

Like hospitals across the region, Waterbury Hospital has experienced lower volumes this winter, with a shift to lower-reimbursed outpatient services from higher reimbursed areas, the release stated. 

In the first four months of the fiscal year, the hospital has lost more than $2 million and left unchecked, could lose $6 million by year’s end. 

"I can’t let that happen," Stromstad said.  "We can’t continue to absorb these losses."