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March 14, 2024

Bristol Health eliminates 60 positions in cost-cutting effort

HBJ FILE PHOTO Kurt Barwis is the president and CEO of Bristol Health, an independent hospital system.

In an attempt to cut costs, Bristol Health, parent company to the financially struggling Bristol Hospital, announced that it has eliminated 60 positions as part of a broader cost-cutting effort.

Bristol Health President and CEO Kurt Barwis, in a statement, said the hospital system laid off 21 employees and eliminated 21 vacant positions. The remaining positions were eliminated through “improved staffing management.”

The staff reductions will result in approximately $6.1 million in savings, and they came after Bristol Health reported a $12.8 million operating loss in fiscal 2023, Barwis said.

“These decisions were extremely difficult and painful to make,” he said. “They were made after careful consideration of alternatives and with the best interest of our patients and the community we serve. It is important to note that these changes did not include any reduction in core services, nor will they impact the safety or quality of the services we provide.”

Bristol Health has been working with consultants over the past year or so to get advice on how to turn around its struggling financial position.

Those experts have made multiple recommendations, from fixing inefficiencies to using artificial intelligence to quickly appeal insurance claim denials.

Bristol Health includes Bristol Hospital and a network of about 100 healthcare providers in 20 central Connecticut locations.

The health system at the end of its 2022 fiscal year violated a financial covenant tied to a $34.6 million bond offering it was issued in 2019. Those funds helped finance a major renovation and expansion of the hospital’s emergency department, in addition to refinancing older debt.

Bristol Hospital’s new emergency department was financed, in part, by a 2019 bond offering that totaled $34.6 million.

The September 2022 covenant violation was a result of the health system not having enough days of cash on hand to satisfy its bondholder’s agreement. That forced Bristol Health to negotiate a default waiver with bondholders, which was granted, and to hire an outside financial consultant.

The covenant violation followed several years of financial struggles for Bristol Health, which reported a $16.5 million operating loss in fiscal 2022.

Barwis said the financial environment for healthcare institutions continues to be challenging due to a multitude of factors, including the rising costs of staff salaries and wages, drugs, supplies and uncompensated care.

“At the same time we saw little to no increases in reimbursement rates resulting in overall losses for both hospitals and health systems in Connecticut,” he said. 

Eight months ago Bristol Health implemented corrective actions with the goal of achieving $16.1 million in annual benefit to its bottom line, Barwis said.

In January, the health system was able to achieve that goal, and it completed the first quarter of fiscal 2024 within $200,000 of its budget, Barwis said.  

“Our forward momentum, commitment, discipline and the results of rapid cycle improvement in every part of our organization confirm that we will sustain our mission and rebuild our financial reserves,” Barwis said.

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