Lebanon
A month ago, D-H projected that it would lay off 3 percent to 5 percent of a systemwide workforce of 9,239, or at least 270 employees, to achieve its goal of cutting expenses or boosting revenue for the year by $100 million.
“Our layoff numbers will be well below even our minimum estimate,” Weinstein said in an email sent Thursday to employees.
A newsletter included in the email said notifications of layoffs were expected to be made during the week of Oct. 17, and that “it now looks like we will be able to achieve the majority of our reductions in force through attrition, restructuring, and elimination of open positions.”
The newsletter said there had been more than 50 submissions to D-H’s new online suggestion box, including several that questioned the need for all of D-H’s current vice presidents and managers. An organizational chart filed in February by D-H with Vermont’s Green Mountain Care Board listed nine executive vice presidents and 32 vice presidents of various sorts.
“It is the overwhelming impression of most providers in the southern region that D-H is way too ‘top heavy’ with too many VP’s of this and that,” the newsletter said, quoting one submission.
Weinstein responded in the newsletter that he had “heard that concern loud and clear.” The financial plan, which includes measures to boost revenue as well as cut costs, would “make adjustments in our leadership structure in order to make it more efficient, productive, and cost-effective,” Weinstein said.
Weinstein’s response suggested that cost-cutters would be unsparing. “Redesign of some functions will include reductions in salary,” he said. “All positions are being reviewed as we consider reductions. No department is excluded.”
Weinstein’s email was sent out two days after an earlier announcement of the impending resignation of John Birkmeyer, D-H’s executive vice president for integrated delivery systems and chief administrative officer. In 2014, the year he was hired — during which he worked four months — Birkmeyer’s compensation package totaled $297,000, according to D-H’s tax returns.
Weinstein, who was D-H’s highest paid employee with a total compensation package of $1.5 million in 2014, acknowledged that it “seems counter-intuitive” to hand out $12 million in merit raises — as D-H still plans to do — after a year when it posted a $12 million deficit.
But he said it was necessary.
“We have to have a salary structure that allows us to reward and retain our people,” he said. “When we defer wage packages, it actually costs us in terms of turnover and inability to recruit.”
The deficit in question surfaced during the final quarter of the fiscal year that ended June 30, when a $23 million operating loss for the quarter pushed D-H into the red for the year.
The loss led to a credit downgrade by one rating agency, and prompted Weinstein and his top managers to begin looking for additional revenue and reduced expenses.
The newsletter included in Weinstein’s email was a resend of last Friday’s D-H Today, an employee newsletter. It was resent, he said, “knowing that in our busy days, many don’t always get an opportunity to read” it.
Rick Jurgens can be reached at 603-727-3229 or rjurgens@vnews.com.