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Phoebe CEO Wernick: Multiple factors lead to cuts

Officials at Phoebe Putney Health System say there were a number of factors that led to the recent elimination of 33 leadership positions throughout the system. (Albany Herald file photo)

Officials at Phoebe Putney Health System say there were a number of factors that led to the recent elimination of 33 leadership positions throughout the system. (Albany Herald file photo)

ALBANY — Some of the factors that have caused uncertainty in the health care field have resulted in a loss of dollars many hospitals might not see come back anytime soon.

The result, officials say, is often the re-evaluation of resources — Phoebe Putney Health System included.

Officials at Phoebe announced to staff and the public late Tuesday afternoon that the management-level reorganization which began in August has resulted in the elimination of 33 leadership positions in various departments throughout the system, ranging from team leader to senior vice president roles.

While cutting its resources, Phoebe CEO Joel Wernick said the Health System has taken a three-tiered approach, which goes from non-labor costs — most recently seen with the announcement of its future supply distribution center, labor costs — either through attrition and reducing layers of management — and concludes with the process of realignment.

The motive for doing this rests in part due to recent changes in regulations and reimbursement, including sequestration, which officials say is expected to have a costly impact for Phoebe just by itself.

“Sequestration, whether people realize it or not, is impacting a big part of society,” Wernick said. “(Many of its effects) can’t be undone. That on its own is a $5 million impact (this fiscal year).”

As the Affordable Care Act was being put together, Wernick said, the hospital industry negotiated away Disproportionate Share Hospital dollars with the intention that they would be replaced with the expansion of Medicaid. When states were given the option of whether they wanted to expand Medicaid, Georgia state officials decided against it.

“The DSH payments are going away and Georgia doesn’t have anything to replace it,” he said.

Meanwhile, the general state of the economy has resulted in more and more people who are uninsured. “The Affordable Care Act may provide subsidized insurance, but some may still fall in the gaps,” Wernick said.

The impacted leadership positions have been identified and notices have been given out. Now, the process has begun to place some of them into positions in the system that have been vacant.

“Some have already accepted vacant positions,” Wernick said. “It is our hope is that there is a large percentage that go into vacant positions. (Meanwhile), we are offering severance packages.

“Even if a position is vacant three months from now, we will continue to (consider the impacted personnel) as high priority.”

Wernick declined Wednesday to give the names of the senior vice presidents impacted.

Whether circumstances down the line may result in more cuts is under evaluation. While efforts are being made to determine where efficiencies can be improved, input is coming from those outside of management on how it can be done with minimal impact to patients, the CEO said.

“I’ve encouraged the work force to give advice. I’ve already got five emails this morning (with suggestions),” Wernick said just prior to Phoebe’s noon hospital board meeting on Wednesday. “Our goal is to go to non-labor expenses first, (but in the interest of being realistic) we are looking at all alternatives.

” … We are making these decisions in a point of strength to remain that way. (To cut jobs) is heartbreaking, and it’s what we go to last.”