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Wednesday, 10 October 2012 14:36

MedWest hopes round of layoffs will shore up financial picture

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The three MedWest hospitals in Haywood, Jackson and Swain counties laid off 82 employees this week to cope with shrinking revenue and declining patient volume.

The layoffs are part of a larger workforce reduction in recent months. Another 79 positions at MedWest hospitals have been eliminated through attrition.

In all, 161 positions were eliminated from the three hospitals — accounting for 13 percent of the workforce.

The move will save almost $7.4 million annually. MedWest leaders said the layoffs are regrettable but necessary in light of on-going financial challenges.

“Yes, this is a turning moment economically even though it is a sad day,” said John Young, the acting CEO of MedWest and a vice president with Carolinas Health System.

The layoffs won’t affect the quality of care or patient experience, according to MedWest leaders.

“We won’t let it touch the patients,” said Cliff Stovall, chairman of the Haywood Regional Medical Center board.

While there is clearly a quest to save money, the board isn’t willing to make cuts that would compromise the quality of care, Stovall said.

“We don’t want to exist as a hospital if we don’t give quality care. There is no point to be a bad hospital,” Stovall said.

Declining patient volumes actually meant the hospitals didn’t need as many workers.

“I am not at all minimizing the impact of these decisions but the reality on that front is that we have to match our staffing to the volumes we are experiencing in order to maintain financial viability on a go-forward basis,” said Steve Heatherly, the CEO of WestCare based in Jackson County.

WestCare has lost money for at least the past three years. While Haywood posted a slight positive operating margin last year, this year it expects to fall back in the red.

Young said the financial challenges faced by MedWest’s hospitals are not uncommon.

“So many hospitals all across the country are having to adjust staffing during these times,” said Young.

That trend for MedWest is exacerbated, however, as it continues to lose market share to Mission Hospital in Asheville.

Harris has seen a particularly striking drop in market share, down to only 50 percent of inpatient treatment sought by Jackson residents coming to Harris. Haywood, meanwhile, has actually held its own in market share, which is hovering around 62 percent, although its still not where it needs to be.

But officials believe more business is up for grabs going forward. MedWest simply has to fight to get it back and show that local hospitals and doctors are just as good as Mission.

“The good news is in this market place there is volume that can be attained,” Young said.

Young said the layoffs are unfortunate, but the financial challenges will eventually be overcome.

“The monster in the bushes is always worse than the monster in real,” Young said. “In real life we are doing the prudent thing. We are making the organizations more stable.”

Hospital workers have unfortunately become accustomed to workforce reductions. This marks at least the third round of layoffs or workforce reductions for both Haywood Regional and WestCare since 2008.

Some jobs were also eliminated when MedWest was formed in 2010. The partnership brought together Haywood Regional Medical Center and WestCare. Certain positions simply didn’t need to be duplicated at both Haywood and Harris once the two had partnered.

The layoffs could add to the dissatisfaction emanating from the Jackson County doctors and rank-and-file hospital employees at Harris. They blame the MedWest partnership for the financial struggles and loss of patient volume seen at Harris.

The WestCare board of directors formally declared it wanted out of MedWest last month. Haywood may not let WestCare go easily — if at all, however.

“The agreement hasn’t had a chance to succeed yet,” Stovall said. “The system has to be given a chance to work. That is our goal.”

Haywood’s hospital board hasn’t made a formal decision yet on whether to let WestCare go amicably, however.

While the management structure for the hospitals has yet to shake out, both sides of the MedWest system are remaining focused on what has to be done.

“Staffing adjustments alone will not address our most fundamental challenge of declining patient volumes,” Heatherly wrote in a memo to staff Tuesday. “We have an outstanding medical staff and dedicated employees at both our hospitals. We must serve our patients and engage our communities in ways that motivate and drive patients to choose their local doctors and their local hospitals for their care and treatment where they can remain close to home and be near family and friends.”

 

MedWest makes staff reductions

While layoffs were announced simultaneously at all MedWest hospitals Tuesday (Oct. 7), how many and which jobs to cut were decided on by the individual hospitals.

MedWest-Haywood laid off 56 people, with 31 positions eliminated through attrition in proceeding months.

WestCare laid off 26 people, with 48 positions eliminated through attrition in proceeding months.

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