Manchester-based Eastern Connecticut Health Network, which owns Rockville General Hospital in Vernon and Manchester Memorial Hospital, plans to freeze wages for the rest of its current fiscal year, according to a Journal Inquirer report.
Here are four things to know about the plans.
1. The financially challenged ECHN will freeze wages to make up for recent cuts in state aid. As a result of state budget cuts, the network's hospitals will see their Medicaid reimbursements reduced by $7.4 million in fiscal year 2016, ECHN CEO Peter Karl said Tuesday in a letter to employees, adding that reimbursement for services provided by the hospitals in the previous fiscal year was still pending.
"These significant cuts along with increasing hospital costs will impact the care provided throughout Connecticut in the scope of programs offered as well as the number of clinicians available to deliver care," Mr. Karl wrote, according to the Journal Inquirer. "They will also prevent many of the reinvestments needed in the state's healthcare delivery system and affect local access to services.”
2. In addition to the wage freezes, ECHN said it will continue to suspend its contributions to the retirement accounts of employees at Manchester Memorial and Rockville General hospitals, according to the report. The network also plans to begin suspending contributions to the accounts of employees of its visiting nurse operation, its subsidiary that operates area physician office practices and its Woodlake nursing and rehabilitation facility in Tolland, Conn.
3. The wage and contribution freezes were intended to apply to all employees of the network, according to Mr. Karl. However, Mr. Karl said members of the nurses bargaining unit at Manchester Memorial had "elected to reduce positions" instead of lose ECHN's "discretionary core" and "money match" contributions to their retirement accounts, according to the Journal Inquirer.
4. According to the report, ECHN's announcement of the planned wage and contribution freezes comes weeks after the network disclosed it had awarded Mr. Karl a 41 percent pay increase.