Springfield Hospital CEO seeks community support, cuts move forward

Springfield Hospital
Springfield Hospital interim CEO discusses importance of community support. Photo by Sharon Huntley.

SPRINGFIELD, Vt. – As Springfield Hospital and Springfield Medical Care Systems continue to look for ways to cut $6.5 million in annualized expenses, the way back to viability will largely depend on the support from the community. Interim CEO Michael Halstead said that a key factor in saving the hospital will be “if the community continues to support this organization by coming here for their healthcare, and we can keep the activity levels up to where they’ve been or ideally increase them.”

Halstead has had to make some tough decisions in recent weeks, cutting 27 staff positions and instituting across the board salary reductions of 10 percent for salaried workers and 4 percent for hourly workers, which goes into effect Feb. 24. Cuts in staffing focused primarily on non-patient care areas in administration, managers, and supervisors in order to ensure that excellent patient care remained a top priority.

With the salary reductions about to take effect, Halstead has been speaking regularly with staff and has been impressed with their dedication to the hospital and to the patients they serve. Although Halstead admits many staff members will find the salary cuts challenging, their initial response has been positive. According to Halstead, “Most have said, if that’s what it takes to continue this organization to be able to provide healthcare services to this community, then they’re willing to do it.”

As of now, there are no other plans to reduce staff but ultimately activity levels at the hospital will dictate staff adjustments. “It really depends how supportive our community can be about coming here,” Halstead said.

To further cut expenses, the hospital is now evaluating what are called “service lines” within Springfield Hospital and SMCS. These are specific categories of care such as surgery, or childbirth and women’s care, etc. Halstead and his team will be comparing direct expenses and revenues from each service line to determine which areas contribute positively to the overall organization. “If it’s not contributing a positive and we can’t make needed changes, then we’ve got to think about whether that is a service that we should continue,” said Halstead.

The decision of which of those services will be eliminated will likely be made in the next three to four weeks, then it would be another month or so before a particular service would end completely. SMCS would coordinate with other nearby health care providers to take on those patients from a service line that is ending.

In other cost cutting measures, Halstead will also be reviewing all contracts the hospital has with either physicians, other providers of care, and with vendors. He will look to renegotiate those contracts “to lower them for some period of time and look at other types of expenses that we’ve had that we can avoid…vendors have been patient with us so far and we’re going to have to ask them for a little more patience and maybe sit down and have them talk to us about how they might be able to help us through this process,” he said.

For now, the path forward is one where everyone must “share in the pain” as Springfield Hospital and SMCS continue to sharpen their pencils and stabilize their finances from within.

According to Halstead, there is no expectation of any further influx of money from the state. At the end of January, Springfield Hospital received a loan of $800,000 from the Vermont Agency of Human Services to keep it afloat in the short term. That loan will start to be paid back in October of this year and be paid in full by June of 2020. And although Springfield Hospital is exploring how to work more collaboratively with Dartmouth Hitchcock, “as far as any kind of financial support, I don’t anticipate anything like that coming from Dartmouth.” Halstead said the state and Dartmouth both want to see the organization take the steps necessary to try and balance the outflows and inflows of cash, which is what he is doing now.

The next few months will be critical as Halstead and his administrative team continue to identify new opportunities for savings and make the tough decisions necessary to save the hospital and SMCS.

It’s a challenge they have embraced since arriving in January. “If we can help this organization, the people who live here and seek good healthcare here, and the people who work here to have good employment and continue living here, that’s a great goal to have. I’d be proud to say I helped in doing that,” Halstead said.

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