We recognize that they impact you and your families and we wish we did not have to make such difficult choices.
HUNTSVILLE, Alabama - About 8,000 Huntsville Hospital employees won't be getting raises in the coming budget year and will also have to pay more for their health insurance.
CEO David Spillers notified employees on Friday that hospital leaders were forced to make some "difficult decisions" because of flat patient volumes, rising employee health insurance costs - expected to top $50 million next year - and declining reimbursements from Medicare, Medicaid and private insurers.
"It is a very challenging time for the health care industry," Spillers wrote in a memo to the hospital's workforce. "People in our country want all the fabulous service and technology we can provide when a loved one is in need. The problem is no one wants to pay us fairly to provide those services."
"All of this leads us to little choice but to continue to manage our expenses prudently and look for ways to reduce our operational costs."
Spillers said the following changes will take effect July 1, at the start of the hospital's new budget year:
- Salaries will be frozen at current levels, with no possibility of merit increases or cost-of-living adjustments.
- Employees covered by the hospital's health insurance plan will see their monthly premiums for both single and family coverage jump by about $40. Spillers said $13.48 of the increase is directly related to Affordable Care Act mandates.
- The hospital will no longer make a basic annual contribution to employee retirement accounts equaling 5 percent of a person's salary. However, it will increase its matching contribution to 100 percent of their first 5 percent of salary saved by employees.
- Beginning with the July 7 pay period, employees will no longer accrue earned time off while taking earned time off. However, some staffers with large ETO reserves who had been required to take three days off each month will have to use only two days of ETO each month in the new budget year.
The changes affect about 8,000 employees of Huntsville Hospital, Huntsville Hospital for Women & Children, Madison Hospital and Decatur Morgan Hospital's Decatur General and Parkway Medical Center campuses.
"None of these decisions were easy to make," Spillers wrote. "We recognize that they impact you and your families and we wish we did not have to make such difficult choices. We encourage you to keep up your good work and we are confident we will get through this period.
"Huntsville Hospital has been in business for 118 years because of the great care we have provided," he wrote, "and because we have made wise but difficult decisions in our history."
Spokesman Burr Ingram said the hospital is dealing with a "healthcare world that has turned upside down," including $4.5 million in recent sequestration-triggered Medicare cutbacks and patients avoiding hospitals because they can't afford to pay for the care.
"We're certainly sensitive to the challenges this puts on all employees, but it's very clear these are unusual days we're in," Ingram said Monday. "The great news is that no jobs are being lost and everybody stays employed."