In an attempt to bolster its financial position in 2013 and beyond, CVPH Medical Center laid off 17 employees.
A total of 9 of them were management and the remaining 8 were hourly staff members.
Cuts to reimbursement and a nationwide trend of fewer admissions and outpatient services contributed to a shortfall in revenue.
“This step is necessary in order to help sustain our medical center in the future,” said CVPH Medical Center President Stephens Mundy. “Regardless, it is one of the most difficult decisions we have had to make in my 10 years at CVPH.”
Hospital officials looked throughout the organization in making the decision. The management cuts included at least one top-level administrator.
The hourly employees included positions in information technology, human resources and finances. No direct caregivers or nurses lost their jobs as hospital officials were careful no to impact patient care.
The 17 individuals laid off will receive severance pay and health insurance through the end of the year along with assistance in finding other employment.
Hospital officials blamed the move on a shortfall that exceeded $400,000, meaning that, through September, CVPH operating expenses exceeded operating revenues by more than $400,000. That was largely due to cuts in reimbursement, fewer admissions and reduced use of outpatient services.
That figure would have been far greater if CVPH had not qualified for a $3.2 million federal Meaningful Use grant as part of a national program to fund development of an electronic medical record system. For accounting purposes, the grant was credited as operating revenue.
Mundy said the systemic changes in health care and a number of short-term business cycle factors created a “perfect storm” that undermined CVPH’s finances after three of the stronger financial years in the medical center’s history.
“Over the past several months we have initiated a number of measures to reduce future expenses,” Mundy said. “Physician recruitment is working to fill positions that opened unexpectedly this year. The pending affiliation with Fletcher Allen Partners will generate additional savings through group purchasing.”
Also, several new physicians are slated to begin serving the community next summer.
Mundy noted that the state and federal governments are investigating ways to pay less and, at times, take back monies they already paid. Ultimately, he said, everyone is seeking greater efficiency and less expensive ways to meet future health-care needs.
“Our challenge is to find new, more efficient ways to continue to provide safe, quality care that meets the needs of our patients and their families.”
Mundy believes CVPH is well positioned for the future at a time when the health-care industry is at a crossroads and some hospitals will fail.
CVPH employs more than 2,300 people, and the layoffs represented the elimination of slightly more than five percent of management and less than one-half of one percent of hourly staff members.
Last month, members of the administrative staff voluntarily took a reduction in pay.
“CVPH is an excellent medical center that will continue to provide exceptional care for its patients,” Mundy said. “Our mission is to provide quality care for North Country residents. That has not, nor will it, change.”