LDS Hospital eliminated 20 positions this week and may eliminate more in an attempt to steady the bottom line. The layoffs may be the first in a series at some Utah hospitals, while others are advertising for additional personnel.
University Hospital is also considering layoffs to help offset its own revenue shortfalls, said hospital spokesman John Dwan. But HCA St. Mark's, Pioneer Valley and Holy Cross hospitals have no plans to reduce personnel in the near future. However, if a vacancy opens in a Holy Cross hospital, efforts will be made to fill it "within.""We have been able to keep our work force even with the fluctuating census and have no plans for any decrease in force," said Cliff Samuels, St. Mark's human resources director.
Pioneer Valley is advertising for more staff, having lost seven nurses and other employees to Operation Desert Storm.
"We are understaffed. If they want to drive across the valley, tell them to come and see us," said Jon Goates, Pioneer's director of marketing.
LDS Hospital took its first bath in red ink last year, falling more than $1 million short of balancing its budget.
"We're not in a position where we're going to close our doors," said LDS Hospital Administrator Rick Cagen. "I hope this crisis doesn't put us in a position of drastic layoffs, but I can't guarantee that it won't," he said. The 20 layoffs constitute 0.5 percent of the hospital's work force.
The financial crisis prompting LDS Hospital's layoffs plagues the entire health-care industry, said John Taylor, spokesman for Intermountain Health Care, LDS Hospital's parent company. Federal reimbursements for care provided to Medicaid and Medicare patients fall far short of the cost of caring for those patients, Taylor said. In addition, LDS Hospital has been forced to give insurance companies deeper discounts on care provided to the companies' clients in order to keep the insurance companies' business, Cagen said.
Dwan also blames insufficient Medicaid and Medicare reimbursements, plus indigent care, for financial problems plaguing University Hospital.
"We may have to raise some costs, eliminate some positions and shift the costs of those who can't pay to those who can to make up for a $33 million shortfall," he said.
Dwan said the hospital has instigated a budget review program but at this time doesn't anticipate across-the-board cuts.
"We are seeing where programs can be combined or made more efficient. The revenue centers - those areas that charge for services - will have to cover their costs, and some charges may have to be raised," he said.
While some positions may be eliminated by attrition, Dwan said layoffs may also occur.
Asked if other IHC hospitals planned layoffs, Taylor said, "I'm not aware of any. But with this kind of financial environment, who knows?" Layoff decisions are made by individual hospitals and not IHC, he said.
Dwan believes all hospitals are facing financial problems and rural hospitals will be hardest hit by the lack of Medicare and Medicaid reimbursements.
But Cagen said patient care will not be affected by the cuts. Those laid off did not provide care to patients. The hospital told the employees Tuesday of the layoffs, announcing that they were effective immediately.
Many employees will be offered jobs in other departments, Cagen said, though some will have to take a pay cut. The employees will be cared for, he said.
"IHC has a very, very lucrative severance policy. Anyone laid off gets a minimum of three months pay, and some people receive up to five and six months pay."
LDS Hospital has taken other steps to reduce expenses, including implementing a case-management program designed to eliminate unnecessary patient procedures. Hospital staff evaluate each patient's case, making certain that unnecessary expenses are not incurred in caring for the patient, Cagen said.
In an effort to give the patient the best care "sometimes we overtest," he said. "We are looking at that."
LDS Hospital will continue to provide excellent patient care despite the cutbacks, he said. He blamed part of the hospital's revenue lag on better patient care. Procedures that required a five-day hospital stay five years ago often only require a one-day stay now, he said. As a result, bed occupancy at LDS has dropped 10 percent in the past two years.
The nursing shortage got some blame, too. "We have to pay a premium to get those people," Cagen said, and that drives up personnel costs. LDS Hospital also spent $8 million on new equipment last year.
Tethered by financial problems, the hospital may whittle its role in providing sophisticated critical care to the region, Cagen said.
"In conjunction with the University Hospital, we do things that no one else in the Western region does," he said. "We do heart transplants, bone-marrow transplants, kidney and pancreas transplants. We have a shock/
trauma intensive-care unit and a high-risk maternity and fetal-care program."
All of those services are costly, he said. "During the coming year we will be deciding whether it is prudent for us to continue doing those sorts of things."
The hospital expects to be back in the black next year if it stays within its 1991 budget.