MOUNT VERNON — Knox Community Hospital, the county’s third largest employer, will see a reduction of its work force after managers determine how to eliminate positions in the varied departments.
The announcement came to KCH employees earlier this week through a memo and staff meetings. The news became public this morning.
The hospital employs 650 full-time-equivalent employees (FTEE). Bruce White, chief executive officer, explained each FTEE equals 2,080 work hours per year. The number of actual employees is a larger number that combines full-time and part-time employees.
The reduction in work force will impact between 6 and 9 percent of the entire staff. White said a good estimate was the loss of 50 employees, but there are several factors that will determine the ultimate number. Only when the final determination is made will an accurate number of eliminated jobs be available.
“I can’t just say 50 people,” he said.
White described the reduction as a “significant hit” to a staff that is made up of positions from cleaning and kitchen help to doctors and nurses.
“All employees are being evaluated,” White said when asked by the News if all employment aspects of the hospital were being scrutinized for cuts.
White explained there is no predetermined set of criteria managers will be using to evaluate each employee. However, things like seniority and performance evaluations “may” factor in to the decision. Skill sets such as certifications and training will also be part of the evaluation.
Managers are expected to determine where the cuts will be made by mid-December. All eliminations will be in effect no later than Feb. 1. White said administration felt it best to be transparent about the need to cut jobs and how the process will work in order to show and maintain respect between employees and employer.
“Our first objective is to not impact quality of care. We want to maintain the quality of care, patient safety and customer service that we provide. That’s job one.”
The key to the reduction process, White said, is planning. Because managers are evaluating individual employees and each position, it is possible to move employees around or share services. Again, how that factors in the final outcome has yet to be determined.
To make the cuts, White said the hospital has been comparing its operation to other hospitals in a database of 600 other facilities. Items such as man hours and patient volume are being compared to similar hospitals on a department by department basis. The goal, he said, is to create a work force that will operate the best patient care with the best financial efficiency.
Those employees who maintain their positions at KCH could see a reduction of salary and benefits.
The reason behind the need for elimination of positions are many and varied, White explained.
“There has been a significant trend taking shape in the hospital industry the last couple of years of shrinking reimbursement due to reduced patient volumes, changes in the patient populations seeking care, and overall increasing hospital costs,” White said in a memo circulated to hospital staff.
This morning White emphasized several talking points that demonstrate growing concern across the health care industry pushing more hospitals to make similar cuts and alterations to their overall financial portrait.
White explained that as policy deductibles continue to rise, consumers start to question the need for extensive testing and even question whether or not they need to be treated by a health care professional for symptoms.
“Out-of-pocket expenses are changing the paradigm,” White said. “We are feeling that hit when people don’t seek treatment because deductibles are too high.”
Commercial insurers are continuing to follow the reimbursement schedules set up by the government for Medicare and Medicaid. Because of this, White said hospitals are seeing a decrease in the reimbursement from private insurance companies that, in the past, have made up for low levels of government reimbursement. For every dollar KCH spends on patient care, Medicare will reimburse 82 cents. For most self-pay patients, White said the hospital will realize a pay back of between five and 10 cents. Most of that, he said is because of the charitable expenses of the hospital. For those who fall into specific financial guidelines, medical care can be provided free of charge. Over the past three years, KCH have provided $10 million in unreimbursed health care each year, which includes charity, bad debt and Medicaid shortfalls.
White also discussed a discount the hospital used to realize in its purchase of cancer-fighting pharmaceuticals. The program provided a monthly savings of $100,000. Following restructuring of the qualifications of the program, KCH no longer was eligible for the savings.
“It was a $1.2 million a year hit to us immediately,” White said.
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