Loretto, the company that operates a number of nursing homes for the elderly has recently hired an external management firm in order to streamline operations. However, this move is expected to cause some of the 2,000 employees of the firm to lose their jobs. Loretto spokesman, Mr. Michael Connor said that the company had hired the services of Healthcare Management Partners LLC from Philadelphia to provide operational oversight and management services. He said that the firms’ goal was for it to become more efficient and more financially responsible.
Connor said the move would help streamline processes and would involve reductions in the workforce due to budget modifications. However, he did stress that the timing of jobs losses and the number of people who would find themselves out of a job was not something that had been determined yet.
Healthcare Management Partners already has experience working with a number of other nursing homes as well as hospitals and has a good record of turning round financial problems by making them more efficient.
The union that represents the Loretto employees, 1199SEIU has told of how it does not expect the job losses to affect front line staff. However, they are expecting management jobs to be affected. Vice president Ruth Heller said “We have protections in our contract and they would need to give us notice and justification if front line workers were affected.” She also said that Loretto are not the only nursing home trying to save money and streamline operations and that this was down to the fact that payments were shrinking.
Most nursing homes rely on funding from Medicaid with around 50 percent of Lorettos’s $116.2 million turnover in 2010 coming from the Medicaid funding. However, most nursing homes often complain that their costs are not covered by the funding. In 2010, Loretto showed a deficit of over three quarters of a million dollars.
At the moment the Mr. Bruce Buchanan who is Healthcare Management Partner’s managing director is acting as chief executive officer and president of Loretto and he has plenty of experience with over 30 years in the industry. He has shown his ability to turn around the fortunes of failing hospitals and nursing homes in his capacity as chief executive officer of both the Phoenix Baptist Hospital and the Northeast Baptist Hospital.
The previous president of Loretto, Mr. Michael J. Sullivan, resigned in July 2011 and the interim replacement was senior vice president Sally Berry.
