25 positions cut at hospital
The exterior of Washington Hospital
Gary Weinstein, CEO of Washington Health System
Washington Health System Monday cut the equivalent of 68 full-time positions, a result of lower admissions at Washington Hospital and what it said was a $2 million reduction of Medicare payments to the hospital as a result of federal cuts in the sequestration.
The majority of the cuts, about 90 percent, were made at Washington Hospital and impacted both union and nonunion positions. While some of the cuts eliminated unfilled positions, and others were shifted from full time to part time, a news release from WHS said the cuts will mean that about 25 full-time employees will lose their jobs.
WHS has roughly 1,700 employees system-wide, with the majority employed at the hospital. Health system Chief Executive Officer Gary Weinstein said total hospital employment was 1,610 before the cuts and now stands at 1,551.
Weinstein said in the release that the reductions were made as a result of federal payment cuts as well as declines in admissions being experienced both regionally and nationally.
Weinstein said department heads were meeting with their staffs throughout Monday to discuss the cuts.
Weinstein said later Monday the admissions decline affecting Washington and other area hospitals is attributed to several factors.
Chief among them are mandates from insurance companies that have replaced “admission stays” with “observation stays,” which have resulted in lower payments by insurers.
He explained that health insurers traditionally paid hospitals a fixed fee based on a patient’s diagnosis and other health factors related to the individual.
Within the past few years, however, insurers have moved to payments for the observation stay, which pays for diagnostic tests on an admitted patient, who later may be sent home without further treatment at the hospital.
He said the observation stay payment is typically 50 percent less than the admission stay payment, even though the patient is admitted for a stay at the hospital for the tests.
The effect of the recession, when many people lost health insurance coverage or their employers adopted high-deductible insurance plans, is another factor that has probably caused some people to postpone care, Weinstein said.
The third factor in fewer admissions is a result of greater emphasis on preventing readmissions of recently discharged patients.
According to Weinstein, during fiscal year 2011-12, Washington Hospital had 14,795 admissions, but is projecting about 1,000 fewer admissions at the close of the current fiscal year, which ends June 30.
WHS said since the passage of the Affordable Care Act in 2010, it has made plans to adapt to changes in the health care environment. According to the news release, the health system has reduced its supply costs by more than $1 million annually by entering into a contract with a new purchasing company. It said it also has reduced personnel to match workload reductions, mainly through attrition.
With the Affordable Care Act scheduled to go into full effect in 2014, Weinstein said still other factors that could impact the hospital remain to be seen in the months ahead.
Hospitals across Pennsylvania are waiting on a decision from Gov. Tom Corbett whether to expand Medicaid payments. Weinstein said studies have shown that hospitals could expect to see more reimbursements from an expanded system.
While Republican governors in Ohio and New Jersey have reversed their earlier opposition and approved expanded Medicaid systems in their states, “Corbett still hasn’t given it a green light,” Weinstein said.
He said it’s also unclear whether new health care insurance subscribers who will be able to buy health insurance under the Affordable Care Act will do much to help hospitals improve their bottom lines, particularly if most of them purchase cut-rate coverage.
The result, Weinstein said, is the hospital pursuing its mission of providing quality care with less money.
“Neither the government nor employers are going to be providing more money for health care,” he said. “I’ve told our staff we’re going to have to provide quality health care at a lower cost.”