Baystate Health cutting 300 jobs due to $75M budget gap

Cuts to affect both management and "frontline team members"

SPRINGFIELD, Mass. (WWLP) – Western Massachusetts’ largest employer has announced that it plans to cut about 300 jobs in the coming weeks. Baystate Health announced that the decision is being made due to a $75 million budget gap for the fiscal year that begins on October 1.

In a news release sent to 22News Friday morning, Baystate Health President and CEO Mark Keroack said that a majority of the job cuts will be in Springfield, though there are expected to be cuts elsewhere in the Baystate system. The cuts will affect a whole range of their operations, from administration to “frontline team members,” though Keroack says that they will focus their reductions on “non-clinical” areas.

The affected workers will receive severance packages and may apply for positions within Baystate Health that are open.

“Many factors are causing this projected shortfall, most significantly the continuing shortfalls in the reimbursements we receive for providing Medicaid services. Other factors are also contributing to this challenge; most prominently the recent decision by the Centers for Medicare and Medicaid Services not to accept corrected wage data resulting in the $23 million in reduced Medicare reimbursements next year as well as increased spending on wages and benefits, pharmaceutical costs and malpractice insurance,” Kerocack wrote. “We are excluded from supplemental Medicaid funding, even though we are one of the largest providers of medicare in the whole state. That’s about a $40 million hole we have to dig out of every year.”

He said that management has been able to make changes in strategy that essentially reduce Baystate Health’s gap to about $35 million, but the job cuts are needed to deal with the remainder of the gap. Even so, it will not solve the financial problem completely.

“Even after these painful steps, we expect to face a remaining budget gap of $15 million. We’ll continue our work to address this gap and do all we can to preserve jobs,” Keroack wrote.

For Aubrie Smith of West Springfield, the change is personal. She gave birth to all 4 of her children at Baystate Medical Center. “My daughter was even in the hospital for a whole month at one point,” says Smith. “So to know that you either lose the people that take care of them or the things that are going to make them get better, it’s a really heartbreaking decision.”

Baystate Health currently employs about 12,500 people.

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