After 3 meetings between MCDH Senior Management and Officials of the United Food and Commercial Workers Labor Union during the past 45 days, I am very sorry to announce that the 2 sides have been unable to reach an agreement on a series of cost reduction strategies proposed by management that we believe would have brought our hospital back to a necessary level of financial stability in the next 15 months and would have preserved the level of services that are currently available at MCDH.
Our management team had sought 2 outcomes from these meetings. First, we wanted to reach an agreement on some specific action steps that we can accomplish within the next 3 months. At the very least we expected to receive a compromise offer from the UFCW leadership that would still allow us to move forward. Second, we expected that ultimately the choice of a partnership solution between both sides would be put to a vote by our employees. Neither of these steps was taken by UFCW.
We regret that this inability to reach an agreement will have an effect on the services that we provide. The MCDH Management team proposed the following 4-step plan to financial recovery.
- An immediate 5% reduction in hourly compensation for all staff. This would match the 5% reduction that has already been in effect for hospital managers and supervisors for the past 4 weeks.
- A repeal of the 3% wage increase that is due to go into effect in July of this year.
- A repeal of the 6% employer contribution to the employee’s retirement plan beginning in July of this year. Employer matches for fiscal years 2011 and 2012 would not be affected. MCDH would continue to make required contributions into those 2 plan years in June of 2012 and June of 2013.
- The implementation of an employee contribution for dependent coverage under the current health plan. Under this fourth step, MCDH would continue to cover all employees for 100% of the cost of the employee’s health insurance plan. However, we asked that employees and MCDH share in the cost of dependent coverage.
MCDH Administration does not take lightly the gravity of asking our employees to help at this critical time. Our plan includes having our medical staff contractors share in a 5% reduction as well. Employees may think that the troubles that MCDH is experiencing are only happening in Fort Bragg and on our Coast. They are not. Each of us does not have to look far to see that other hospitals in our region, as well as cities, counties and businesses are also struggling. We are not alone in this. MCDH management has implemented several cost savings measures, including a management restructuring, a profitability improvement plan for home health, a labor productivity program and the 5% reduction in management salaries. All of these steps will save over $1 million for MCDH this year. However, at the rate that the hospital has been sustaining losses during the most recent winter months, this will not be enough to put MCDH back on solid financial footing. Our inability to reach an agreement on a financial improvement plan means that management will continue to seek other ways to trim costs from our budget. I will keep our employees and the community informed, as we continue to pursue ways to return MCDH to profitability.