Hospital Systems Cut Non-Clinic Payrolls

The nation’s economic downturn claimed two more victims Friday when Wellmont Health System and Mountain States Health Alliance announced a combined 195 layoffs.

All positions eliminated are non-clinic, meaning they do not include physicians, nurses or caregivers.

Wellmont permanently laid off 86 from its network of nine hospitals and health care facilities in Northeast Tennessee, Southwest Virginia and Southeast Kentucky.

Mountain States’ realignment has eliminated 109 positions, though officials there said a number of those employees would fill other positions within their health care network, which includes more than a dozen hospitals and clinics in the region.

WELLMONT

Mike Snow, Wellmont’s interim chief executive officer, said Friday that thee system’s board of directors anguished over the thought of layoffs, but after inpatient volumes went flat and emergency room visits declined during the past six months, the decision was the only reasonable option.

“Our board voted on this Thursday afternoon,” Snow said. “In prioritizing the reduction, we tried to make them in areas as far away from patient care as possible. The [patient] volumes have not fallen off at Bristol Regional Medical Center, but the number of patients in the system on whole has flattened.”

Snow said the Wellmont layoffs are permanent and affected employees will receive undisclosed severance packages.

“Like most health systems and other employers across the country, Wellmont is challenged by the current economic climate,” Snow said. “We are not immune to the struggling economy, and we are taking these preemptive measures to ensure our long-term success. While having to say goodbye to even a small number of our valued employees is very difficult, we must make these changes now to strengthen Wellmont today and for the future.”

Wellmont is taking a number of steps to address the impact of the ongoing regional and national economic downturn on the organization’s hospitals.

An additional 60 positions that are vacant will not be filled. These positions also are primarily non-clinical, Snow said.

In response to the ongoing economic downturn, Wellmont also plans a $1 million reduction in corporate and administrative expenses such as marketing, human resources, information technology, legal affairs, finance and other non-clinical areas.

Wellmont also has modified the scope of Project Platinum, the ongoing expansion of Holston Valley Medical Center in Kingsport that was announced nearly four years ago. Wellmont already has committed more than $100 million to the project, and construction plans are under way in key areas of the hospital, including improvements and additions to the operating rooms, the intensive care unit, emergency department, and patient access and parking.

However, construction of the proposed “E” tower, which would have expanded women’s and children’s services, will remain on hold until the hospital can reassess the situation.

“It’s a tough situation,” Pat Kane, Wellmont senior vice president, said about the layoffs. “It’s not a decision that was made lightly.”

NATIONAL TREND

Snow and Kane said hospitals nationwide are being affected in similar ways due to the economic downturn.

A recent American Hospital Association survey of 736 hospitals in October and November revealed that fewer patients are seeking health care, while at the same time a growing number of patients need help paying for care.

More than 30 percent of hospitals nationwide report moderate to significant decline in patients seeking elective procedures, and nearly 40 percent reported a drop in overall admissions, according to the survey.

“The economic downturn has meant real pain for families and communities, AHA President and CEO Rich Umbdenstock said in a written news statement. “For many, a pink slip also means losing vital health coverage and represents tough choices about the family budget. This report underscores those decisions as people put off needed health care, as well as the challenges hospitals face as they work to meet the needs of their community.”

MOUNTAIN STATES

Friday’s announcement from Mountain States officials came unexpectedly and about 15 minutes after Wellmont informed the media about its layoffs.

As is the case with Wellmont, Mountain States announced that the number of positions eliminated was based primarily on declining inpatient numbers. However, officials said the trend results from a loss of doctors in certain communities as well as decreased utilization of patient services.

“This current economic situation is impacting the financial position of Mountain States,” Dennis Vonderfecht, Mountain States president and chief executive officer, said in a written news statement released Friday. “At the same time, it also is challenging our system to focus on its future success through realignment of resources, including our total workforce, to better meet the health care needs of our region.”

Vonderfecht, like Wellmont’s Snow and Kane, said the organization’s leadership focused its attention on positions that were “farthest from the bedside,” turning to a number of administrative and clerical positions.

Over the past year, Mountain States also has seen an increasing number of uninsured and underinsured patients needing care, while state programs such as TennCare and Medicaid are reducing reimbursement in an effort to meet their own budget shortfalls, Vonderfecht said.

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