Cutting Back

Hospital Layoffs Loom

Southampton Hospital will lay off 25 full-time employees, including seven registered nurses and two vice presidents, and also reduce the hours of 25 part-time and per diem employees, as of Feb. 7.

Hospital officials promised there would be no further cuts this year, noting that the last staff reduction was five years ago.

Dr. John J. Ferry Jr., the facility's president and chief executive officer, and Richard Q. Byers, its executive vice president, notified its 900 full and part-time employees of the decision in a memorandum Friday. The Hospital and Health Care Employees Union Local 1199, six of whose members are affected, and the New York State Nurses Association, the nurses' union, also were notified Friday.

Hope To Rehire

Those who lost their positions, most of them hired within the past two years or less, learned the news by Monday. Their reactions were said to have included grief and disappointment, with one question first on their minds: Would they be rehired when the financial picture improved?

"Absolutely," said Dr. Ferry. "This is not about capability or performance." As jobs become available, through attrition or retirements, he promised, those let go this week will be called.

Most workers declined comment, though some longtime employees expressed dismay at what they called the "top-down" action, noting that over the past year or so management has touted a new communications program of "shared decision-making" at the hospital.

"We are like a family," said one nurse, speaking on condition of anonymity. "This is very sad."

Among the seven to lose management positions are Richard Fenton, vice president for professional services, who supervises outpatient facilities and laboratories, and Rebecca Chapman, the development director, also a vice president. Mr. Fenton has worked for the hospital for five years, Ms. Chapman for two.

Refinancing

Friday's announcement was not unexpected, coming on the heels of a year marked by financial distress and an accompanying slowdown in the expansion of hospital facilities and services. The board is taking "prudent steps to bring expenses in line with revenues," said Elliot Vose, its chairman, who described the move as a "relatively minor retrenching."

Dr. Ferry said that, after showing a small surplus in 1996, the hospital was "several million dollars" in the red. He estimated its 1998 operating budget at $68.8 million, 8 to 9 percent lower than last year's.

To deal with a now persistent cash-flow problem, something most of the nation's hospitals are contending with, Southampton Hospital officials plan to take on a new, long-term mortgage - for as much as $16 million - against its six-acre Southampton property. An existing mortgage, a $55,000-a-month obligation dating back to the 1970s, will be paid off in October.

Talks are under way with several banks, Dr. Ferry said, adding that a decision will be made by the end of this month.

Caught By Surprise

The loan should ease the flow of payments to local contractors, several of whom have complained in recent weeks that the hospital is in a rears for work and materials on various projects.

"None of us is crazy about the slow pay to our friends and neighbors," said Mr. Vose.

"Surprised by the combination of events" in 1997, hospital officials "overestimated patient revenues a little," for both in-hospital and outpatient care, Mr. Vose explained, and underestimated the impact of delayed reimbursements by managed care companies.

Mr. Vose said the board may hire an outside fund-raiser later this year to launch a new $25 million capital campaign. Such an endowment, "like Harvard's and other universities'," he said, would "help us replenish, close the gap" where government and insurance reimbursements fall short.

To Buy In Bulk

The private, nonprofit hospital also expects to save roughly $2.5 million a year from cooperative purchasing now possible through the Peconic Health Corporation, a consortium of the three East End hospitals.

Employees have received regular briefings on the hospital's financial status since it reached a crisis in October. With cash reserves at a low point, it delayed payments to employee pension, health, and child care funds, sparking union reaction. The hospital has since brought its payments up to date.

The staff reduction will save about $1.2 million in salaries and benefits, Dr. Ferry said this week - "just shy" of the amount the hospital will lose in new Medicare reimbursement reductions. Close to another $1 million will come from cost-cutting measures, including slashing the staff-training budget by $200,000, its marketing and printing budget by $100,000, and eliminating the use of some outside consultants and service contracts.

Still Optimistic

The staff cuts leave five top administrators, including besides Dr. Ferry and Mr. Byers, Joseph Zwolak, who manages finances, Teresa Samot, in charge of patient services, including nursing, and Patrick Long, who supervises the facilities.

"I'm every bit as optimistic as I've ever been" about Southampton Hospital, said its president. "Our nursing staff is superb, and the care here is efficient and warm."

"With these cuts," he added, "we won't lose that."