SPRINGFIELD, MA (WGGB/WSHM) -- Baystate Health announced its recent staff reductions and cost-cutting measures have stabilized the budget, marking the first positive financial year in several years for the region’s largest healthcare provider.

Baystate Health President and CEO Peter Banko explained, “So this last year, we were in the positive for the first time in the last couple years…We were able to reinvest over about $180 million back into our facilities. We’re going to make sure we stay in the positive, so going back to the negative, we hit our budget for the first time in six years.”

The financial improvement comes after Baystate Health cut nearly 300 positions since 2024, including a voluntary separation program announced in November across the system and subsidiaries, including Health New England.  The staff reductions followed significant operating losses in recent years: $177 million in 2022, $63 million in 2023, and $146 million in 2024.

Banko said the health system now faces another hurdle with federal legislation that is estimated to cut $4 to $5 billion from the state’s healthcare budget. The legislation takes effect next October.  “So the One Big Beautiful Bill doesn’t kick in ‘til next October, so I view the next 11 months as preparing for that,” he added.

Baystate will implement a “Stronger Together” plan, which includes expanding access and services, continuing cost cuts and streamlining, developing new revenue streams and value-based care, and pursuing mergers, acquisitions, and partnerships.  “I do think healthcare systems in Western Mass. have to work together, right? We’re all in this together and partnership is one good way,” he noted.

The health system projects revenue growth of only two to three percent annually while expenses are expected to increase by more than six percent. Challenges include potential increases in uninsured patients and decreases in federal funding.  “Our board and leadership are committed. We’re not cutting services. We’re going to be here, with a safety net,” Banko said. “We’re going to have to make some tweaks to our business model to make sure it works and we continue to thrive and we’re working on improving access to our community.”

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