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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Reader Reactions
The statement “All positions eliminated are non-clinic, meaning they do not include physicians, nurses or caregivers” is totally untrue. At a local cancer center in the Southwest Virginia area, there were three nurses that were laid off. I wonder how many other nurses were laid off by either Wellmont or MSHA and were not reported.
Oh there’s definitely a nursing shortage. MSHA I know can’t keep nurses. They have more travel nurses than STAFF nurses! My spouse works for MSHA and they are always begging for help but then cancel him when he has too much overtime…yet they can pay their travel people 45 bucks an hour or more, and they pay their own staff nurses a whole lot less than that. They should get rid of the travelers FIRST and take care of their own. Also, MSHA lays people off, but is still building that million or more hospital, Franklin Woods. Give me a break, the “we have no money” excuse is simply a cop-out.
wellmont has flagrantly spent money on remodeling and rock walls and publicity and advertising and over blown salaries for exec. now to recoop the cost of their mistakes they are laying off i dont see much difference between wellmont and gm or chrysler Bad Managment i wonder how many executive jobs were cut or even took a cut in salary probably none but im sure we will never know wellmonts policies are not constant they are made from department by department which leaves alot of lead way for them to do and say what they want we are just workers and the public what do we know accept what they tell us i know for a fact they are compromising patient care for cost and that just aint right is this what this country is coming to its all about the almighty dollar what a sad sad day
First of all, there is no nursing shortage. Don’t let anyone tell you differently. The nurses are there, its just that MSHA and Wellmont don’t want to pay nationally competitive wages for nurses.
Second, both hospitals state that they have done everything the could to cut costs before using layoffs as a final measure. That is not true. Something the various news agencies should be asking the management of both hospitals is this… “How many executives took a pay cut in order to save the jobs of others?“ Check out MSHA and Wellmonts federal 990 tax forms for the last several years (they are all publicly available online). Look at what the execs make and then ask why they continue to make such large amounts of money while others lose their jobs. A 50% paycut would have saved a couple million dollars.
If you figure an average salary of $50,000 (and that’s being generous), laying off 109 people at MSHA only saves the company roughly $5.5 million - I would imagine that the average salary of those layed off at Wellmont isn’t much different. Something that could have been done was to cut everyone in the company’s wages by 3-5%. This would have saved them $7-13 million. People wouldn’t be happy but they would still have jobs and MSHA would have saved a lot more money.
It doesn’t sound to me like every effort was made to prevent job losses. IT sounds like greed has gotten the better of management.
I’d love to see the media ask MSHA and Wellmont these questions and find out why the fat cats continues to garner such large salaries and make everyone else pay the price.
NurseGirl, thanks for sharing that. After reading the article I assumed that the cuts were clerical in nature as everyone else would. I can’t imagine in a world with such nurse shortages that when cuts are made that is where they have to be made. We all know there is a management position that is not needed somewhere in an organization of that size. Large organizations almost always have too much upper management, the ones that make too much money and drain the system. I myself know a gentleman than works for MSHA and travels for them and when he needs a rental car he rents an Escalade instead of an economy vehicle.
I hope Wellmont is not following suit and letting go Nurses. Never should a business decision effect the level of care.
First, I understand to some degree that Wellmont and MSHA needed to make up for the money they were losing, and I guess that justifies job cuts. I don’t agree with how they went about it, but I’ve never had to eliminate anyone’s position before.
In this article it states that MSHA’s attention was focused on positions “farthest from the bedside” but I ask the question, how much closer to the bedside can you get than a couple of staff nurses, a couple of charge nurses and for good measure, a couple of RT’s? I guess there was a “miscommunication” somewhere.
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