Lifespan announces layoffs, early retirements to address financial woes

Rhode Island Hospital in Providence.Lane Turner/Globe Staff

PROVIDENCE – Lifespan announced Thursday that it has laid off 55 people in its corporate services office and another 216 employees across the company have agreed to retire by March 28 as the state’s largest health care provider restructures to address its financial challenges.

The company’s announcement comes as the hospital network finds itself on the front line of the coronavirus outbreak in Rhode Island, which has five residents who have tested positive for the deadly disease and hundreds more in self-quarantine.

Lifespan CEO and President Dr. Timothy J. Babineau said the organization, which reported losses of $35 million in the 2019 fiscal year, has been “working on a restructuring strategy in recognition of the uniquely difficult market in which we operate.” He said 70 percent of patients now use Medicare or Medicaid.

“While our financial challenges began well before the Covid-19 virus outbreak, we are reminded by recent events of the unique, essential, and lifesaving role our doctors, nurses and all our health care providers play in caring for our community,” Babineau said in a prepared statement. “Lifespan’s viability as an essential community asset requires financial stability to ensure we can continue as the state’s largest and most important healthcare system.”

Babineau said the layoffs represent 5 percent of Lifespan’s corporate services office. Lifespan owns Rhode Island Hospital, The Miriam Hospital, Newport Hospital, and Bradley Hospital.

In December, officials at Lifespan said “a dramatic and unexpected reduction in Medicare rates,” the lasting impact of the closing of Memorial Hospital in Pawtucket, and the continued loss of specialized medical care to Boston were responsible for the organization losing $55 million last fiscal year. (The loss was partially offset by investment income, which is why Lifespan reported a $35 million net loss.)

“These restructuring efforts will continue systemwide throughout 2020 as we seek to find efficiencies and economies of scale while ensuring that care is protected at the bedside,” Babineau said. “We greatly value the contributions of all our staff and deeply regret the need for any job loss.”