Facing a projected $3 million operations loss, Hill Health is preparing for 29 “quick and quiet” layoffs.
Those details emerge from the minutes of a meeting of the Cornell Scott Hill Health Center’s finance committee.
Hill Health, which has about 450 employees and runs 16 community health centers in and around New Haven, faces dire financial difficulties. The organization’s CEO recently resigned on the heels of an investigation into allegations of mismanagement.
The finance committee minutes from last month’s meeting amount to a staggering list of bad news heaped upon worse news. The minutes indicate that Hill Health has decided to layoff 29 workers. One board member was assured at the meeting that the layoffs would be “quick and quiet.”
Hill Health interim CEO Michael Taylor did not return a call for comment by press time.
Hill Health laid off 25 workers in February of this year, after 30 layoffs in May, 2011.
Some highlights, or low-lights, of the meeting minutes:
• Projections indicated that Hill Health’s “bond covenants would again be in default, which would make for two consecutive quarters in which we would be in default.”
• Hill Health’s “net deficit from operations is $516K and, if annualized, we would be on track for a $3M loss. G. Austin [Grace Austin, interim CFO] stated that if we continue on this pattern, it could be the third year in a row of significant losses, which could jeopardize our funding status primarily with HRSA [the federal Health Resources and Services Administration] and other grantors.”
• Austin told the committee that Hill Health is suffering grant losses of $120,000 (”$1M annualized”). “G. Austin stated grants are about 20 percent of our business and that last year there was a $900K loss in grants and noted we’re on track for another loss.”
• Hill Health’s pharmacy department has had a loss of $1.1 million. The ear, nose, and throat department is losing $250,000. The labs department has lost $562,000. As of the end of November, Hill Health’s cash flow will be $500,000 in the red.
In one glimmer of hope, the minutes state that the Department of Social Services (DSS) verbally agreed to advances of $500,000 per month for four months.
DSS had initially stated a preference “that there be no layoffs,” the minutes state. DSS later requested that Hill Health “handle the reductions in an incremental and departmental basis based on a profitability standpoint and right-sizing the organization,” according to one board member.
“G. Austin responded that the 29 layoffs still have to occur,” the minutes state. “A. Lobo stated that DSS requested that we not have a massive layoff. L. Kaufman inquired if it was going to occur quickly to which M. Taylor and A. Lobo agreed that it will be quick and quiet.”