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Desperate Hospitals – March 2009 Update

Posted Mar 19 2009 5:23am

This is a monthly update I started back in October 2008, when Century City Hospital, on the outskirts of Beverly Hills, located in the heart of corporate image USA in the Los Angeles area could not get funding or find a buyer and had to close.  This sent a message off to me that something was cooking and is terribly wrong with healthcare.  Each month I have been updating and this month is a summary of what hospitals are doing to survive, including everything from layoffs, meetings, budget revisions, etc. and there are also some closures and bankruptcies in the links below.  

One item of importance is the message from the American Hospital Association below.  Hospitals are running out of money and the only industry in general that seems to have cash available is risk management with their “reserves” and hopefully those are in good shape to keep insolvency from spreading to another facet of healthcare.  There are some areas that leave questions as well with inquiries rising about expansion and building, but why are existing employees being asked to take pay cuts while the expansion projects move forward. 

A report from the American Hospital Association:

A Thomson Reuters analysis released March 2 found about 50% of hospitals were in the red in the third quarter of 2008. All types of hospitals are continuing to feel the financial strain. The study tracked two dozen key financial indicators, including reimbursement rates, inpatient volume, and revenue and profit, at 439 U.S. hospitals.

Also, this week, Kaiser Permanente reported laying off a large number of Health IT employees, around 800, and this article from the Rancho Cordova Post states there will be more forthcoming. 

Kaiser Foundation loses $794 million in 2008 – Investments and the Economy slated for the downturn

_______________________________________________________________

Individual Cities and States:

I am sure I didn’t catch everyone, so feel free to add more information in the comments section but hopefully this month’s update will bring about an awareness of what is happening with our hospitals. 

In Cleveland, Ohio

CLEVELAND (AP) -- The Cleveland Clinic is warning that it will be forced to cut more than 400 jobs if a new hospital fee stays in the state budget.
Clinic government relations officer Oliver Henkel told lawmakers at a hearing Wednesday that the proposed franchise fee would cost the research hospital more than $40 million over the next two years.
In a letter last month, the Ohio Hospital Association warned Gov. Ted Strickland that the fee would cost all hospitals $410 million and lead to more than 6,800 layoffs statewide.
The Strickland administration is standing by the franchise fee, saying it was included in the governor's two-year budget proposal to help support the state's Medicaid coverage for 1.8 million Ohioans.

In Queens, New York

Two Queens hospitals stopped accepting patients are preparing to shut down for good.

St. John's Queens Hospital in Elmhurst and Mary Immaculate Hospital in Jamaica stopped accepting patients at midnight Sunday and officially close their doors Monday.

Workers held a vigil outside St. John's Saturday night.

The hospitals closed because their operator, Caritas Healthcare, recently filed for bankruptcy.

The move will leave about 2,500 people out of work.

Emergency room doctors at Jamaica Hospital Medical Center used to notice that patient volume followed a pattern each week - starting with a big uptick on Mondays and Tuesdays.

"And then it would sort of correct itself during the course of the week," said Dr. Geoffrey Doughlin, the hospital's chairman of emergency medicine.

But ever since two neighboring hospitals - Mary Immaculate Hospital in Jamaica and St. John's Queens in Elmhurst - filed for bankruptcy in early February, that pattern has been thrown out of whack.

In Boston, MA

Beth Israel Deaconess Medical Center, facing a $20 million loss this year, says it is cutting expenses by freezing salaries for some employees and reducing top executives' pay, and also considering layoffs.

In an e-mail to employees, chief executive Paul F. Levy said the expense cuts are necessary because of state cutbacks on Medicaid payments, a disappointing contract with Blue Cross and Blue Shield of Massachusetts, and an unexpected drop in patient volume.

In addition, many hospitals depend on charitable donations from wealthy philanthropists, as well as income from investments. Between the Bernard Madoff scandal and the plunge in the stock market, much of that income has evaporated for many institutions. Many Boston hospitals also hold annual fund-raising activities in Palm Beach, Fla., where numerous residents have been affected by the Madoff scandal.

Beth Israel Deaconess Medical Center has identified some $16 million in potential cost-cutting measures, allowing the cash-strapped hospital to reduce its number of “necessary layoffs” from over 600 to about 150, the hospital’s chief announced.

Note:  hats off to Mr. Levy’s approach with involving everyone in staff meetings to create solutions in these difficult times and the hospital was able to reduce the number of anticipated lay offs to 150 instead of a higher anticipated number.  My personal opinion is that this should be status quo at every facility.  BD

In New York

The merger of two Amsterdam, N.Y. hospitals will result in job losses, but just how many is not yet known.

St. Mary’s Hospital and Amsterdam Memorial Healthcare have been in talks for about two years, and a formal acquisition agreement is expected to be signed in the coming weeks. St. Mary’s, the larger of the two hospitals, would be the survivor.

Amsterdam Memorial employs 495 people, and a WARN notice filed with the state lists all of them as being part of a plant closure. However, Victor Giulianelli, president and CEO of St. Mary’s, said the hospital expects to retain 80 percent to 85 percent of those people. This means between 75 and 100 people would lose their jobs

In Akron, Ohio

AKRON, Ohio - Akron General Hospital is laying off 145 employees or 2.5 percent of its 5,778 work force.  Very few of the affected jobs are in direct patient care, said spokesman Jim Gosky.

The layoffs include administrative, clerical, managerial, and non-managerial staff.  Most layoffs are effective immediately, but some workers have until the end of the week or next week because of contract issues.

"We are doing everything we can to improve financial performance," said Gosky.

Registered nurses at Akron General Medical Center have accepted a pay freeze as the hospital continues to look for ways to save money.

Members of the Professional Staff Nurses Association at Akron General voted late last week to approve the deal.

In Atlanta, GA

1.  Grady Memorial Hospital on Wednesday announced 150 job cuts, in response to severe economic pressures and an increase in indigent patients, officials said. Among those who left was the head of the hospital’s cancer center.

The job cuts included about 140 layoffs, said hospital spokesman Matt Gove. About 10 of the positions were not filled. Many of the people were laid off Wednesday. They included staff in the departments that focus on purchasing, nurse scheduling, legal services and also include one ultrasound technician.

None of the eliminated positions will affect direct patient care, Gove said. The cuts are spread across several departments of the hospital, he said.

The cuts include the loss of Philip Lamson, the executive director of the Georgia Cancer Center for Excellence at Grady, officials said.

2.  The maternity ward in south DeKalb County's only hospital will close in April, leaving doctors and expectant mothers scrambling for a place to deliver babies. Most patients are just learning the news this week.

The formal decision was made in February after DeKalb Medical Center officials realized more women in live in south DeKalb County are opting to have their babies at hospitals other than the Hillandale facility. The Lithonia-based hospital was built less than four years ago to serve south DeKalb County.

In Cincinnati, Ohio

CINCINNATI - An industry long considered safe has become the latest victim in the job market meltdown.

University Hospital and the Drake Center have laid off close to 50 workers combined, and Drake officials said the move wasn't easy.

The rehabilitation center laid off 23 workers, and Thursday was the first day without them.

In Cleveland-Akron, Ohio

Three hospitals in the Cleveland-Akron area on Tuesday announced more than 200 layoffs and unveiled plans to shutter some programs and expand others to try and adjust to lower patient volumes and tough economic times.

Akron General Medical Center said it would lay off 145, largely non-medical, positions. St. Vincent Charity Hospital and St. John West Shore will lay off 60 staff members - both clinical and non-clinical jobs.

There were additional announcements in the state. The Health Alliance of Greater Cincinnati also said Tuesday it would layoff about 50 employees at two of its hospitals, spokesman Tony Condia confirmed.

In Passaic, New Jersey

PASSAIC, N.J. - Passaic's last hospital has filed for bankruptcy protection.

Officials at St. Marys Hospital say they'll stay open for "business as usual" as the hospital reorganizes.

At the end of January, St. Mary's said liabilities exceeded assets by $59 million and it had a day-and-a-half of cash on hand.

St. Mary's provides care to a large number of poor and indigent patients.

In Los Angeles, CA

Pacifica Hospital of the Valley, a 221-bed facility in Sun Valley is reportedly $50 million in debt.

An attorney for the hospital blames skyrocketing expenses and slumping revenue.

He says Pacifica gets sixty percent of its funding from Medi-Cal and twenty percent from Medicare for treatment including emergency care, occupational therapy and social services. Payments hospitals received from Medicare, Medi-Cal and private insurers declined rapidly last yea

In Silsbee, Texas

When the idea of a new hospital for Silsbee was first born, optimism was high and plans were big for the burgeoning project.

After a while, it appeared that the project had stopped moving altogether, though representatives from Renaissance Healthcare Inc. assured residents and their city leaders that progress had just slowed.

As of this week, Silsbee’s new hospital is DOA.

Representatives of Renaissance met with the board of directors for the Silsbee Economic Development Corp. this past Wednesday, Feb. 25. During that meeting, much of it held in executive session, Renaissance assured leaders that the project was still ongoing. They did concede though that the hospital would likely need to be built in phases rather than all at once.

But, then, all at once, a bankruptcy court this past Thursday ordered Renaissance to shut the doors to all of its hospitals.

In Hollywood, CA

The facility is located in the San Fernando Valley and will require moving 100 patients and has been run by the Motion Picture Relief Fund and was a place for the “needy” to retire and be taken care of.  The hospital facility is one more victim of today’s economy.  Recently in the news there were picket lines and around 300 people will be looking for work. 

In Atlantic City, New Jersey

HAMMONTON — Kessler Memorial Hospital closed Thursday — just days after it appeared to have a buyer.

The hospital’s board of directors terminated the agreement signed Friday for cardiovascular surgeon B. Reddy Dandolu to buy the hospital, Interim Chief Restructuring Officer Michael Sandnes said in a statement released by the hospital.

“The buyer could not obtain and transmit the necessary funds, as agreed upon, in order to continue operation of the hospital,” Sandnes said.

Dandolu signed a letter of intent to purchase the hospital for a reported $7.5 million and agreed to pay a nonrefundable $300,000 down payment by the close of business Monday. That money was to be used to help cover a $500,000 payroll shortfall that prevented the hospital’s employees from getting paid last week.

A $200,000 loan from the town to cover the balance was contingent upon the hospital receiving Dandolu’s down payment first.

In Chicago, Illinois

CHICAGO -- More than 190 doctors at the University of Chicago Medical Center signed a letter to trustees protesting plans to reduce the number of beds available to emergency patients as "unnecessarily risky" and a threat to patient safety.

The controversy over the prestigious hospital's unusual plan is being closely watched by emergency physicians across the U.S. as hospitals wrestle with rising costs and sometimes inadequate reimbursements from federal and state programs. The hospital has done pivotal research, such as the Nobel Prize-winning development of hormone therapy for cancers. Last month, two high-ranking doctors resigned from the university's medical leadership over the administration's plan.

In Danville, New York

Many presidents and chief executive officers of area hospitals handle information through their public relation departments and press releases.
However, with proposed cuts from the state of close to $4 million to area hospitals, administrators gathered at Noyes Memorial Hospital in Dansville Monday morning to discuss what cuts they have made and what cuts are coming.
As lobbying groups continue to fight to restore funds and throw numbers to the public concerning economic impact and potential job losses, most hospitals are acting now.
“Over the last five, six years, we’ve cut, cut, cut but we have not cut vital services,” said Eva Benedict, president and chief executive officer at Jones Memorial Hospital in Wellsville. “Jones Memorial sits in the center of (other hospitals) within a 30-mile radius. That is a long way to travel if you are having a heart attack, bleeding or having a baby right away.”

In Mason City, Iowa

A Mason City-based hospital is restructuring its home health care and hospice programs, eliminating nearly 60 jobs. Mercy Medical Center-North Iowa will close facilities in Rockwell and Forest City, but all 59 people affected by the changes will be offered other jobs within the company.

Diane Fischels, the hospital's vice president of operations, says it was a tough decision to trim back services, but it's hoped it will not lead to any layoffs. She says Mercy employees are the most important part of the organization. While some employees may be in different positions than what they are used to, she says the hospital is happy to be able to provide jobs in other sectors of the organization.

In Saginaw, Michigan

SAGINAW, Mich. -- Two local hospitals have announced plans to cut their workforce and reduce employee hours because of financial losses.

At Gratiot Medical Center in Alma, 28 positions are being eliminated with reductions in hours for another 46 positions.

MidMichigan Medical Center in Clare will close its obstetrics service May 1, cut 23 positions and an additional 20 positions will have hours reduced.

The eliminated positions represent 2.6 percent of Gratiot employees and 6.6 percent of the Clare workforce.

In Greenwood, South Carolina

GREENWOOD—Citing the downturn in the economy combined with lower inpatient volumes, Self Regional Healthcare officials today announced plans to proportionately reduce labor expenses in the coming months through attrition and planned staffing decreases.

This staff reduction could ultimately affect from 170 to 200 hospital employees, which represents 8.5 percent of Self Regional’s staff.

“Due to economic factors and lower inpatient volumes, hospitals across the state and nation are facing bigger financial challenges than usual,” noted James A. Pfeiffer, President and CEO of Self Regional Healthcare. “When people lose or are uncertain about their jobs and healthcare benefits, many put off elective procedures and others are unable to pay for needed care.”

In Youngstown, Ohio

NEW YORK, March 16 (Reuters) - Forum Health, an Ohio-based hospital group, filed for Chapter 11 bankruptcy protection on Monday, according to court documents.

It listed assets in the range of $100 million to $500 million, and liabilities in the same range. Forum said a heavy debt load, population decline in its area, the current economic downturn and restrictive labor agreements hurt liquidity.

In Half Moon Bay, California

Medical center shuts doors…

The Coastside Family Medical Center closed its doors Friday, shutting down the only medical facility of its kind for Half Moon Bay and its outlying communities. The medical center at Shoreline Station announced that it had to immediately close due to longstanding problems of declining revenues and a lack of financial support. The recent swell of economic troubles reportedly made it impossible for the medical center to continue.
The medical facility was an important source of health care for the Coastside, particularly for the uninsured, who have represented about 40 percent of its patients. Its closure means that most former patients will have to travel over to the Bayside to get most medical treatments.
The closure reportedly came as a surprise to the center's employees, who were told about the severe funding problem in a meeting today. Physicians working at the facility had reportedly scheduled Friday appointments with patients that had to be quickly cancelled.

In Rochester, Michigan

ABC 6 NEWS) -- It seems like no one is immune from the far-reaching effects of this recession. And now it's claiming its latest victim: the Mayo Clinic.

The Clinic released its financial report today. image

The Mayo Clinic has fallen on hard times before.

"Mayo Clinic has survived the depression, two world wars, many other conflicts and ups and downs in the economy," said Shirley Weis.

"This has been a very challenging period, both in the national and international economic environment and a lot of volatility, and unfortunately, Mayo was not spared," said Jeff Bolton.

While revenue grew in 2008, so did expenses.

With 7.2 billion coming in and 7.2 billion going out, the Clinic broke even,but only because of the 39 million dollar sale of St. Luke's Hospital in Florida.

Mayo is also focusing on their express care clinics to bring in more patients, which could save jobs.

"Layoffs would be our last resort," said Bolton.

Note:  Back inNovember Mayo closedtheir clinical services division.

In Brooklyn, New York

A hospital in central Brooklyn laid off 240 doctors, nurses and other workers on Monday, signaling growing financial weakness in the hospital industry.

Officials at the hospital, Brookdale University Hospital and Medical Center, which serves Brownsville, East New York and Canarsie, blamed the bad economy for the layoffs. “The general economic downturn has not spared the community served by Brookdale hospital,” said Ole W. Pedersen, a hospital spokesman, in a written statement.

In Rhode Island

The Lifespan hospital system, the largest private employer in Rhode Island, is cutting the pay of top executives.

Lifespan, which includes Rhode Island Hospital in Providence, said Wednesday that its chief executive will take a 10 percent put in base pay and forgo a merit increase.

The chief executives and senior vice presidents of each of the hospitals in the system are also taking salary reductions.

Lifespan said the moves are necessary to deal with the economic recession, including delayed or canceled elective procedures and declining Medicare and Medicaid reimbursements.

Lifespan earlier this year suspended or delayed capital projects and renegotiated vendor contracts to cut costs.

In West Virginia

The West Virginia Hospital Association is closely monitoring the economy in the wake of recent layoffs in the health care industry and the jump in the state’s unemployment rate.

Just after the New Year, three hospitals in the state — Weirton Medical Center, St. Joseph’s Hospital in Parkersburg and Cabell Huntington Hospital ­— reported combined layoffs of nearly 100.

Meanwhile, West Virginia University Hospitals said it would be changing and reducing employee benefits and putting off $20 million in capital expenditures.

In January, West Virginia’s unemployment rate jumped from 4.4 to 6.2 percent.

“We’re closely monitoring the impact of the national economic downturn,” said Tony Gregory, vice president of legislative affairs for the West Virginia Hospital Association in Charleston.

The association represents 76 hospitals and health care systems, which employ 36,000 people and have an annual payroll of $1.6 billion.

In Huntsville, Alabama

Earned days off will drop from about 3 a month to 2

Huntsville Hospital is slashing earned time off for about 4,200 employees to help offset declining revenues from patient care.

Chief Executive Officer David Spillers said the benefit reduction, which will save about $850,000 monthly, is intended to get the nonprofit hospital back on track financially and avoid layoffs.

But a nurse at the hospital, who declined to give her name, said she wonders how administrators can justify spending $65 million on a new hospital in Madison while cutting employee benefits.

"Something's wrong there," she said. "We can't afford to be sick now, we can't take vacation, but they're building a new hospital."

In Detroit, Michigan

The recent layoffs at St. Mary’s Innovis in Detroit Lakes eliminated 19 jobs, with most of the cuts involving part-time positions.

St. Mary’s Innovis CEO Tom Thompson said the cuts come from the effects of the recession that is also hitting the health-care industry.

Another issue is the never-ending battle over government reimbursement for Medicare and Medicaid services. That issue is nothing new for St. Mary’s Innovis, Thompson said.

It still poses a problem, though, because Medicare and Medicaid patients provide more than half of St. Mary’s Innovis’ business.

In Maine

Michaud says that since last fall more than 180 jobs have been eliminated across Maine's 39 hospitals and many others are considering layoffs. More than half have stopped hiring, while others have implemented salary and wage freezes, stopped capital purchases and needed renovations.
"We are anxious to get this cash, especially now when our community is hurting in this economic downturn," says Darlene Stromstad, CEO of Goodall Hospital in Sanford. Stromstad says the hospital has tried to cope with its budget problems by delaying payment on at least a couple million dollars in bills it owes to medical suppliers.
It also has eliminated the equivalent of 30 full-time positions and has hired no one new since November.  "What we'll do first is pay the vendors who have been awaiting payment, and our priority will be those vendors who are in our community," she says.  "Secondly we are hoping to defer any more short-term layoffs. It certainly doesn't solve all our challenges but it does give us a little breathing room."

In Casa Grande, AZ

Some of the employees who were laid off soon after Dernier's resignation doubted any connection between the two events, but did question why someone who had led the hospital so passionately would leave so suddenly.
The board of trustees apparently was surprised by Dernier's resignation and has been working on a plan to seek a permanent replacement. In the meantime, Curphy has taken over day-to-day operations of the hospital. She has been at CGRMC since January 2002.

In Buffalo, NY

Last week 24 research associates from Roswell Park Cancer Institute were laid off, some of them after working at the hospital for decades.

Monday protestors directed a message to administrators, saying "higher-ups" should be able to find a way to save important jobs.

The picketers paraded in front of the hospital for a couple of hours, capitalizing on the name of Roswell's President and CEO, Donald Trump. Large signs read, "Donald Trump--you're fired!" They fear that the mission of the research institute is being lost and that the work of curing cancer will take a hit without the technical help of these skilled professionals.

In Marinette, Wisconsin

MARINETTE, WI -- The declining economy is taking its toll on one U.P. Hospital.  Bay Area Medical Center in Marinette, Wisconsin announced that they will be laying off employees and also reducing hours for others.

Right now, the President and CEO, David Olson, say's 16 management and non-union employees will be impacted, whether through reduced hours or layoffs and 50 union workers, with the Michigan Nursing Association and AFSCME, will also be impacted.

In Honolulu, Hawaii

State lawmakers trying to rescue the Hawai'i Health Systems Corp. are concerned about two recent loan requests from Maui and Kaua'i that raise red flags about the system's financial solvency and management.

Perhaps more unsettling, according to a memo prepared by the state budget office, about half of the $11 million Maui Memorial raised from a bond sale last year was "given" to system administrators in Honolulu to gain approval for Maui to become more independent. Maui Memorial has been talking with private investors and would likely be the first public hospital to consider going private if granted authority by the Legislature.

"If we don't successfully restructure the hospital system and cut spending, one or more of our community hospitals may close within the year."

Below the CEO of Scripps discusses how hospitals in San Diego are affected.

CEO of Scripps in San Diego Talks about Hospitals in San Diego

Hospitals nationwide and in San Diego County are feeling aches and pains from the deepening recession, and some predict a worse prognosis in the coming months.

More patients aren't paying their hospital bills, and more are putting off elective procedures to save cash. Construction projects at some medical centers have been put on hold, and administrative jobs are being consolidated or left open when they become vacant.

Hospitals have little space to maneuver because the stock market decline has slashed their investment income and most credit sources have dried up.

Rising unemployment will only tighten the vise on the industry.

“As the economy worsens, we're going to get hit pretty hard,” said Chris Van Gorder, president and CEO of Scripps Health, which operates five medical centers in Encinitas, La Jolla, Hillcrest and Chula Vista.

Related Reading:

Desperate Hospitals – February 2009 Update

Desperate Hospitals – Updated November 21, 2008

Desperate Hospitals – September 2008

Desperate Hospitals: Chicago Hospital Hangs For Sale Sign
Desperate Hospitals - Hawaii- What is happening to our Hospital System?
Desperate Hospitals - August 29 (Continued)
More Desperate Hospitals - Miami, FL and Cape Cod, MA
A hopeful prognosis - Desperate "California" Hospitals
Desperate Hospitals - Century City Doctors Hospital (Los Angeles) begins shutting down, others file Chapter 11 to reorganize
New New Jersey law to pinpoint financially troubled hospitals - "Desperate Hospitals"
Bankruptcy Bug Hits Hospitals – Desperate Hospitals
Desperate Hospitals: Hospitals in Hands of Voters – Arkansas
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