Unanticipated pension cost increases have forced the Nassau Health Care Corp. in Nassau County, N.Y., to fire at least 35 physicians, system officials say.
Nassau Health Care pension costs for 2003 were supposed to be $1.5 million, but the New York State Retirement System increased those charges to $10 million, says Shelley Lotenberg, a spokesperson for the public benefit corporation.
A notice from the retirement system of a $27 million assessment for 2004, plus a $5 million increase in insurance premiums for the system's 4,000 employees, necessitated laying off 35 physicians, which will save the system $5 million to $6 million, Lotenberg says.
Nassau Health Care operates the 631-bed Nassau University Medical Center, an 889-bed nursing home and seven community clinics. The system employs about 200 full-time attending physicians and about 300 full-time residents.
Not only doctors have been affected by the squeeze. Some 350 jobs were cut in January 2002, and another 200 to 300 employees could be laid off in the beginning of 2004, Lotenberg says.
Newly appointed Chief Medical Officer Leonard Barrett, M.D., chief of thoracic surgery, says the layoffs have made the medical staff "a little nervous," because "they have to absorb a whole spectrum of changes."
Barrett says several departments are overstaffed and treat too few patients. He cites pediatrics as an example, where 22 pediatricians see a total of only 80 patients per day, five days a week. About 10 of those pediatricians are being laid off, Barrett says. Other positions being eliminated include about 12 primary care physicians, some in rehabilitation medicine and podiatry, and one or two doctors at each of the seven satellite clinics.
Nassau Health Care recently introduced a new "efficiency profile" for physicians, Barrett says, that will adopt an RVU system to pay doctors based on productivity.
"We will evaluate productivity every month to see if it's economically wise to keep them around," he says. Barrett says he expects there could be even more layoffs when physicians are re-evaluated in three to six months, but adds that he is "sure others will exceed expectations."
About 26 physicians have received termination notices since last Friday, Barrett says, and the rest will be notified this week. The layoffs are effective immediately. Most people have accumulated vacation and sick days for which they will be paid, he says.