Gov. Juan F. Luis Hospital laid off 24 employees Wednesday, citing severe financial pressure.
“JFL’s financial situation is dire and the layoffs are purely a financial decision,” said JFL Chief Executive Officer Kendall Griffith in a statement. “While this decision was made for the greater good of the hospital, I personally know each team member laid-off today. My heart goes out to each and every one of them. I ask the JFL family and community to support our team members during this time of transition."
Hospital officials said in the statement they expect these 24 layoffs to save roughly $1 million.
The St. Croix hospital has been struggling with severe financial problems for a number of years now. In January 2011, it hired Chief Executive Officer Jeff Nelson, a turnaround expert, to bring the hospital’s finances in order. Nelson resigned earlier this year, almost exactly two years into a three-year contract.
The hospital declared a financial crisis in February 2011. Since that time Nelson and other hospital officials repeatedly warned that without a significant infusion of funds, the fiscal situation would worsen, and warned that JFL’s existence was in jeopardy.
Nelson came under intense criticism from board members, staff and the V.I. Legislature after the hospital laid off 85 licensed practical nurses and certified nurses assistants Feb. 28, 2012.
In December, the board voted to strip Nelson of some of his responsibilities and began searching for a chief operating officer. In January, Nelson resigned, and the hospital named Dr. Kendall Griffin to be CEO in the interim while it pursues a permanent candidate.
In March, the hospital’s governing board implemented a hiring and wage freeze, saying the hospital was operating way over its $67 million budget, projecting expenses of about $80 million. (See related links below)
According to the hospital, the following financial factors forced Tuesday’s layoffs:
• A five-percent, $533,000 reduction in the hospital’s government appropriation that took effect in March;
• Five straight months of negative cash flow over the past fiscal year;
• $35 million owed to vendors;
• The anticipated cost of reinstating the eight-percent cut from all government salaries two years ago.
“With the expected short-term financial impact, there is a sense of urgency," hospital Chief Financial Officer Deepak Bansal said in the statement. "If JFL does not act immediately, some aspect of JFL operations will be adversely affected, whether it is services, pharmaceuticals or payroll. Balancing the health care needs of the community and the cost of providing quality care remains our focus.”
“Reducing this current $1 million expense safeguards JFL’s ability to make payroll in the next two weeks and protect the livelihood of the remaining 653 employees,” Bansal added.
The hospital’s statement gave little information on what positions were eliminated or in which departments. But it outlined criteria used to make the decisions. Those include the importance of positions for patient care, compliance with the Center for Medicare and Medicaid Services and length of service.
According to the hospital, those laid off will be provided:
• A severance package consistent with collective bargaining agreement, based on their years of service;
• Individual consultation of the team member’s personnel file, review of annual leave payout and transitional support such as letters of recommendations based on performance and years of service. Team members with accrued annual leave will be paid in two payments, with the first payment within 30 days and the second payment within 60 days of their last day worked;
• Assistance with the unemployment and job seeking/career counseling processes through the Department of Labor;
• Support and counseling services through the Employee Health and Clinical Psychology services.