COLEBROOK – The economic turmoil combined with the layoff of hundreds of workers from the region's largest employer two months ago is now hitting New Hampshire's northernmost hospital.

Louise McCleery, CEO of Upper Connecticut Valley Hospital, said in a memo to the hospital staff last week that the hospital would be eliminating seven positions and reducing the hours of 12 more, effective immediately.

"My position, as CEO, is among those impacted by reduced hours and reduced compensation," she wrote.

McCleery emphasized that the 16-bed hospital "is not closing and there are no plans to close" it.

The consolidation of operations in late August at the Ethan Allen manufacturing plant in Beecher Falls, Vt., where 60 percent of the workers were from New Hampshire, "has increased our level of charity care and bad debt and placed severe financial strains" on the hospital.

"At this time, we are projecting an operating loss of approximately $900,000 for the 2009 fiscal year, on top of an operating loss of $800,000 in 2008," according to the memo provided by McCleery, who was not available for comment yesterday. "It is important to note that although this process is painful, it will ensure the financial stability and survival of UCVH into the future."

Hospital officials have been looking at ways to decrease costs for several months, while maintaining the quality of care at the rural hospital.

"We have developed a comprehensive program to maintain core services while reducing, outsourcing or eliminating non-essential services across all operational areas," according to the memo. "We will monitor the effect of these changes on an ongoing basis and make adjustments as necessary."

UCVH, a critical access hospital, serves 20 towns in northernmost New Hampshire and Vermont and western Maine, an area of about 850 square miles.