Hospitals cutting payrolls to cope with hard times

A recent series of job cuts shows that tough financial times remain for the state’s hospitals – and may get worse next year, experts say.

The biggest cuts have come in two hospital systems in Columbus.

Columbus Regional Health eliminated 219 positions in a cost-reduction move in November. The cuts came after a $17 million operating loss in fiscal 2013 and a similar loss in fiscal 2014, the Columbus Ledger-Enquirer reported. The job cuts included 99 terminations.

Later in the month, St. Francis Hospital, also in Columbus, eliminated 65 filled positions and 15 vacant positions while grappling with a $30 million accounting inaccuracy it discovered in October.

Newton Medical Center
Newton Medical Center

And last Friday, 23 employees of Newton Medical Center in Covington were affected by staff cuts, the Rockdale Citizen reported.

The layoffs are not at the level that Georgia hospitals pursued during the depths of the recession. And they may be partly a sign of necessary belt-tightening during difficult times.

Still, hospital industry officials see that the current revenue trends aren’t positive.

“There’s no question that the financial challenges that so many hospitals throughout the state are currently facing are unprecedented,’’ Kevin Bloye, a Georgia Hospital Association vice president, said Tuesday.

Since 2013, five Georgia hospitals have closed and many others, especially those in rural areas, are in financial distress, he added.

“Today, several rural hospitals are fighting hard just to keep their doors open while many larger facilities have been forced to lay off employees or reduce certain health care services that are no longer financially sustainable,”   Bloye added.

Also in November, Candler County Hospital in southeast Georgia reduced its staff by 27.

“Many hospitals have cut FTEs,’’ said Jimmy Lewis, CEO of HomeTown Health, an organization of rural hospitals in the state. “2015 may be even worse.”

He said recently that 15 rural facilities are “financially fragile.” Six of those, he said, “could go tomorrow due to low cash.”

Factors in the job reductions, Lewis said, include federal penalties on hospitals for high readmission and infection rates, and reimbursement cuts from changes in the state employee and teacher health plan.

“Hospitals, and especially rural hospitals, have had to cut, downsize and reorganize,” he added.

James Stephens
James Stephens

Such downsizing is occurring across the nation, said James Stephens, a Georgia Southern University professor who specializes in health care economics.

“The economy is sluggish,’’ he said, “and the health care industry is a function of a good employment rate.”

Recent data showed that more than half of Georgia hospitals are operating at a deficit, Stephens noted.

County financial help is vital for rural hospitals to maintain operations, he said.

Newton Medical Center reported that most of the positions eliminated were part time and that the reductions would not affect patient care.

The hospital also indicated, through a spokesperson, that the reductions were not related to efforts by the hospital to form an equity partnership with a larger health care system, the Rockdale Citizen reported.

St. Francis is also looking for a potential partner “to sustain this valuable community asset.”

Lewis said such hospital alliances reflect both a drive toward necessary consolidation and “desperation because of the urgency” of the situation.

These partnerships can make sense for a struggling hospital, said Chris Kane, a health care consultant with DHG Healthcare. “They can address clinical, economic and market position objectives.”