The American Hospital Association's new early retirement program could cost the group nearly $5 million while trimming further its already depleted Chicago headquarters.
AHA executives, though, insisted they have no plans to close the Chicago office, although they conceded they don't know how small it may get.
"We have no targets for what those offices are going to look like in the future," said Richard Wade, the AHA's senior vice president for communications.
Last week, the association disclosed that 54 employees are eligible for the early retirement package, with 53 of those working in Chicago and one in its growing Washington office.
If everyone took advantage of the package, the Chicago work force would shrink by more than 20%. The AHA has 257 full-time-equivalent employees in Chicago.
When Richard Davidson took over as AHA president in 1991 and relocated the president's office to Washington, the association's Chicago office swarmed with 628 workers.
Over that same period, the number of employees in the AHA's Washington office has grown 44% to 72.
AHA executives anticipate expanding the association's Washington office further as its membership changes to include systems of hospitals, physicians, insurers and other types of providers.
Overall, the 54 potential early retirees represent more than 16% of the AHA's work force.
Wade said the AHA has yet to consider whether another round of layoffs at the association would follow if the eligible workers didn't take the AHA up on its retirement offer.
"We haven't thought about that," Wade said of potential layoffs.
MODERN HEALTHCARE disclosed the retirement plan earlier this month (Nov. 3, p. 6). The AHA made specific confidential offers to the 54 eligible employees via a Federal Express mailing to their homes on Friday. It didn't identify the eligible workers.
A memo to AHA staff last week said employees who will be at least 50 years old by Dec. 31 and will have completed at least 10 years of employment by that date are eligible.
"If everybody who is eligible took the most generous package, it would cost us $4.8 million," Wade said. "If everyone took the less expensive package, it would be $3.5 million."
In a memo to staff, AHA Chief Operating Officer Jonathan Lord, M.D., said: "Together we are creating a new, more unified and streamlined organization. Management's pledge to you is to achieve this in a manner that reflects the contributions and value of every employee."
Employee options include enhanced retirement benefits, three months of career counseling and continuation of health insurance until age 65 or until they find new jobs. Employees won't get severance pay.
Employees have until the end of the year to take the AHA up on its offer.