SARANAC LAKE - Over the last 17 months, the Adirondack Medical Center in Saranac Lake has withstood repeated rounds of state budget cuts, resulting in a $649,000 impact to the hospital's bottom line.
According to AMC spokesman Joe Riccio, the hospital has endured these cuts in stride, managing to provide the same quality of care while avoiding cuts to programs and services.
One of the most substantial losses the hospital has faced is the gross receipt sales tax, also called the sick tax. Riccio said the state has siphoned $112,000 in revenue from AMC since April 2008.
"Gross receipt sales tax or the sick tax is basically a tax on every dollar of revenue that we earn at the hospital - a piece of that goes to the state," he said. "And in this case, since April 2008, that represents $112,000 worth of tax on our revenue that's gone to New York State."
Because of the cuts, AMC has been forced to pursue other avenues in relieving the impact of state budget cuts. Chandler Ralph is the hospital's president and chief executive officer.
"From this point forward, we must do everything we can to fight further cuts," she said in a prepared statement. "We cannot absorb any additional cuts."
Riccio explained that AMC - like most hospitals in New York - has a very thin operating margin.
"At the end of the year if we do have any excess revenue, it's used to reinvest in new equipment, new technology, staff training - all the things we do to continually do to improve the level and quality of care at AMC," he said. "So obviously, things like the sick tax that eat away at that small amount of excess revenue that we use to improve the situation, every little piece that we lose affects those positive gains that we like to make."
To offset those lost sources of revenue due to state taxation and budget cuts, AMC has been forced to hold pay increases for non-union employees to a lower percentage increase than in previous years. The same holds true for management positions and executives.
Riccio says that policy is consistent with the Consumer Pricing Index, but unfortunately does not reflect most other cost of living increases. All current union contracts are being honored.
To avoid cutting programming and services, Riccio says department managers sat down and looked at all costs associated with operating AMC.
"Everything was on the table," he said. "We all realized the situation and the shortcomings we had to make up."
"Obviously health care cannot afford to take any more hits, and that is why we are where we are today in terms of advocacy and explaining to the public what we've had to endure," Riccio said.
Department managers and employees alike are paying close attention to overtime to help keep operating costs at a minimum. Vendor contracts have also been renegotiated and in some cases have resulted in significant savings.
But due to nursing and physicians shortages that have hit especially hard in the North Country, AMC cannot cut recruitment costs, Riccio said.
"The value to AMC and to the community is immeasurable," he said. "We need to keep attracting talented staff to continue serving the community."