Sibley Memorial Hospital plans to cut its staff over the next several months through voluntary buyouts, citing anticipated financial losses due in part to a decline in patients, according to documents obtained by The Washington Post.
The Northwest Washington hospital, which was acquired by Johns Hopkins health system in 2010, will give its employees just weeks to consider the offer.
A letter addressed to staff members from hospital President Richard “Chip” Davis lays out the bleak circumstances for the buyouts, saying that “we are projecting a significant budget gap for fiscal year 2018.”
In addition to a drop in “inpatient activity,” the letter points to “rising costs for labor, supplies and technology.” It also describes a shift in reimbursements toward “paying hospitals on the basis of better outcomes and measures of safety, quality and patient experience instead of paying only for the volume of services provided.”
“While change is always difficult, we have made a strong effort to minimize its impact on you, our valued staff, while at the same time ensuring we have the financial resources to enable us to continue to provide excellence and compassionate care — every person, every time,” the letter reads.
The details of the buyout are expected to be discussed at a town hall meeting on Monday at noon. But the documents show that employees will be asked to turn in their applications by Aug. 11, and managers will decide who will receive the buyouts by Aug. 28.
The last day of employment for those who take the buyout will be Nov. 10.
The documents do not lay out how many people the hospital is looking to lose. They do say that hospital management can reject an employee’s request “based on both the number of employees who accept the offer and the operational impact to Sibley.”
Hospital spokesman Gary Stephenson on Saturday said that Sibley’s “overall financial situation remains strong” and that the buyouts were an opportunity for financial improvement identified by hospital leadership and Sibley’s Board of Trustees.
“The goal of this program is to align the need to reduce labor costs with the desire of employees who may wish to depart Sibley,” Stephenson said. The decision to apply for it, he said, “is the employee’s — and the employee’s alone.”
The program, according to the documents, would offer employees one week of pay for every year of service, up to 12 years. It also calls for giving employees a cash bonus of $15,000.
While not explicit about the extent of the expected shortfall, the documents are blunt about the hospital’s needs.
A question-and-answer sheet for staff members asks whether the buyout is “being offered because of financial concerns?” The answer: “Yes.”
Another question asks, “If I leave through the Voluntary Separation Program, how soon can I be rehired?” The answer: “There is no guarantee that anybody would be rehired.”
Before Sibley was acquired by Baltimore-based Johns Hopkins, it had been experiencing a drop in patient volume. The integration was initiated by Sibley but also gave Hopkins its first foothold in the Washington-area market.
At the time, the president of Johns Hopkins Hospital and Health System, Ron Peterson, described the move as strategic.
“Sibley is strong financially, very highly regarded in its community and located in the nation’s capital,” Peterson said. “Having it as part of the Hopkins family provides us the critical mass to better position ourselves to provide an integrated, regional approach to care, which we anticipate the future will demand.”