Byline: Brian Lee

PUTNAM - Day Kimball Hospital, citing a quarterly operating loss of $2.4 million, laid off 5.5 administrative positions this month and reduced the hours of a pastoral care administrator, officials said yesterday.

Robert E. Smanik, president and chief executive

The nonprofit's first-quarter operating loss was $2.4 million, he said. The 103-bed hospital has an annual budget of about $95 million.

In a statement to employees, Mr. Smanik said salary and wages are the hospital's largest operating expense. With the first-quarter loss, he said, "immediate action is required."

The hospital has about 730 full-time equivalent positions and around 900 total employees, including part-time positions, Mr. Smanik said.

The reductions are considered permanent. There is no current plan for further staff eliminations, he said. The changes did not impact hours in direct care to patients.

The layoffs were part of a three-point expense reduction plan estimated to save about $3 million annually.

Other facets of the plan, which went into effect May 1, include extending the hospital's conversion period to paperless medical record technology and a change in future pension fund programs to be more in line with other Connecticut hospitals.

The hospital's fiscal year begins Oct. 1 and six months in, it was evident the facility was falling behind in its financial performance, Mr. Smanik said.

The tough economy and experiences with uninsured patients or patients with not enough insurance coverage were part of the hospital's financial problems, he said.

Mr. Smanik said "uncollectible amounts," or increases in patients not being able to pay bills, has risen because of increases in both high-deductible insurance programs and health-savings accounts.

The rising number of individuals lacking insurance, and less-than-adequate payments from insurers, are among sources of the financial problems, he said.

"We are really an industry much more closely tied to the economy than we have been in the past," he said.

Mr. Smanik speculated revenues might have fallen from October to December because of "individuals postponing service because of the state of their insurance coverage or the economy."

Mr. Smanik, who has been in the post approximately 18 months, said "it was difficult to make difficult decisions early on."

"But Day Kimball has been such a strong community resource for northeastern Connecticut," he said. "Our goal, and the board of trustees' goal, is really to maintain that, the ongoing strength and effectiveness of the organization."

The hospital, which has been operating since 1894, continues to recruit physicians. There is a shortage of physicians in the area, Mr. Smanik said, particularly of primary care physicians. The facility has more than 100 physicians, dentists and medical specialists.

"We're trying to change our services and grow them if we can for the community need," he said. "So on the one-hand, we have to control our expenses; on the other we want to remain competitive and responsive to the community."

ART: PHOTO

PHOTOG: T&G Staff/DAN GOULD

CUTLINE: Day Kimball Hospital in Putnam lost $2.4 million in its first quarter.