Phoebe Putney Health System announced on Thursday afternoon the loss of more than 100 positions due to cuts in operating costs. (Albany Herald file photo)
ALBANY — Officials at Phoebe Putney Health System announced Thursday additional re-organizational changes resulting in the staff reduction of 127 positions.
Impacted employees throughout the system were notified Thursday morning of the action which will reduce system-wide operating costs by $10 million during Fiscal Year 2014. Additionally, some other positions are being transitioned to employment with contracted service providers, giving impacted employees opportunities to fill those jobs, officials at Phoebe said.
Officials at Phoebe also said employees affected by the reorganization are being given priority consideration for positions that become available in the future. The impacted positions were eliminated as of Thursday morning, but the personnel are being maintained as active status in Phoebe’s system for the next few days so they can access benefits as well as have an opportunity to find other jobs within the system.
Of the total number of positions impacted, 54 were filled positions, three of them clinical. While the cuts were felt in all of Phoebe’s hospitals, the majority of them were on the Phoebe Putney Memorial Hospital campus, said Rick Smith, corporate director of marketing and public relations at the hospital.
As of Thursday afternoon, there had been several vacant positions that had been identified as being ideal for the affected personnel to fill, Wernick said. All the employees have been given outplacement, and at least some are expected to receive severance pay.
These cuts are in addition to the 33 management-level positions eliminated earlier this month in various departments throughout the system ranging from team leader to senior vice president roles, ending the labor expense reduction phase of a three-tiered expense reduction plan. Officials say the plan called for non-labor expense reductions, labor productivity optimization and process improvement and re-engineering initiatives.
“Like other hospitals and health systems throughout the United States, Phoebe is facing a tidal wave of economic change,” said Joel Wernick, Phoebe president and CEO, citing area economies, state Medicaid policies, cutbacks in reimbursements, sequestration and uncertainties related to the Affordable Care Act as reasons behind the cuts in the initial announcement to the media. “We’re dealing with an economy and a change in the healthcare industry over which we have limited control.”
Sequestration alone is expected to have an impact of $5 million this fiscal year, Wernick said earlier this month, and has since emphasized that it has resulted in major cutbacks in the health care industry as a whole.
“Sequestration has impacted all hospitals significantly,” Wernick said during a news conference Thursday. “The uncertainty makes all hospitals very conservative … As sequestration hit us, attrition did not hit us fast enough.”
Wernick said that officials were not anticipating any more significant cuts in the near future. In addition to the leadership position cuts earlier in the month, the recent cutbacks have also included the elimination of uniform bonuses and merit pay increases for every Phoebe employee after the organization failed to meet its financial goals from the previous fiscal year.
“The strength in our organization has been in our people, the Phoebe Family,” he said in a news release Thursday. “We are going through a period of enormous adjustment. One of my greatest disappointments is we were not able to achieve the reduction needed in our labor force through normal attrition.”
In a communication to employees, Wernick said the people who left the organization as a result of the cuts “are not just our co-workers. They are our friends and neighbors, and it deeply saddens me that this action had to occur. I mourn their loss, as I know you do too. While we all recognize this, we must not lose sight of the reason why we are here. We exist to care for patients. In order for us to continue to care for patients, we must change how we deliver care.”
Last month, Central Georgia Health System, the parent company of The Medical Center of Central Georgia, said it had laid off about 50 employees as part of a plan to reduce its fiscal 2014 budget.
And Atlanta-based Emory Healthcare recently said it would lay off about 100 employees due to a restructuring of the organization’s neuropsychology unit at the Wesley Woods Geriatric Hospital.
Much of the job reduction trend is due to lower Medicare reimbursement for services, Craig Savage, a Durham, N.C.-based consultant, told Georgia Health News.
Hospitals in states such as Georgia and North Carolina that aren’t expanding their Medicaid programs may be more affected than those in other states, Savage said. That’s because hospitals’ federal funding for indigent care is decreasing as part of the Affordable Care Act, and those facilities in non-expanding states won’t get the offset of more people being insured under Medicaid, he said.
Private insurers are also holding the line on reimbursements, he said. The job cuts will probably continue “until hospitals can manage [costs] in the current economic environment.’’
Rural hospitals in Georgia already have very lean staffs, said Jimmy Lewis, CEO of HomeTown Health, an organization of rural hospitals in the state. Faced with lower revenues, these hospitals have been cutting services such as obstetrics, he said.
Andy Miller of Georgia Health News contributed to this story.