Patients visiting a familiar department at Lenoir Memorial Hospital may have to check the signs to see if they’re heading in the right direction.
In addition, several less employees are clocking into work.
Since announcing a more than $3.4 million budget deficit for the fiscal year beginning in October, hospital administrators and department heads have been assessing where and how to make the cuts that will bring them out of the red.
LMH has announced its remedies, which include cutting 85 positions, or 9 percent of its 916-member workforce, and reorganizing the physical layout of the hospital to save on resources and energy costs.
The total savings is about $6.5 million.
“Our goal was to develop a more flexible care delivery model that allows for the care of fewer patients with fewer people in less space,” hospital president and CEO Gary Black said in a letter to employees this week.
Out of the 85 positions eliminated, 26 were vacant, 19 were deployed to other open positions, 12 elected to take an early retirement incentive package and 15 staff members received involuntary severance packages that included salary based on years of service and medical benefits.
“It’s a very painful process,” Black said. “It’s one we would certainly avoid. We do want to run the hospital so it is viable and open to the community.”
Employees were notified Tuesday, and those who are no longer employed were paid for either a 2-week or 4-week notice. Others are continuing to work through the end of the year.
“We have achieved most of the staff reductions by the elimination of vacant positions, transfer of personnel to other roles and voluntary reductions,” Black wrote. “We were fortunate that only 15 team members had their positions involuntarily eliminated.”
Savings for the 85 jobs cut average about $50,000 per position, said Barbara LaRoque, LMH marketing coordinator.
In addition to the employment cuts, a redesign of the layout of the hospital places most of the departments at the west end of the hospital with room to grow toward the east side.
“Over the next few weeks we will complete the redesign plan with the consolidation of the ambulatory and gastroenterology units on the second floor and the closing of the transitional care unit,” Black said.
By about Dec. 24, the transitional care unit will be closed and patients in transition from acute care to their home setting will be transported to skilled nursing facilities.
The TCU beds were added to LMH in the 1970s because of a shortage of nursing facilities in the community, but there is no longer a shortage, LaRoque said.
The relocation of the TCU will result in the closing of the entire fifth floor, which will save on energy costs.
Ambulatory care, which was on the lobby floor, is being relocated to the second floor to join with the gastroenterology unit sometime this month. Shared resources and staff will save on costs, LaRoque said.
Other relocations have already occurred. The western end of the third floor now houses the medical, renal and progressive care units and the western end of the fourth floor houses the surgery and medical/oncology units.
Those units have room to grow toward the eastern end, as needed. The observation unit is located at the far eastern end of the third floor.
“We will move quickly to get this difficult decision behind us as we prepare and plan for the future growth of Lenoir Memorial Hospital,” LaRoque said.
The reasons for the deficit are state cuts in Medicaid, the state’s decision not to expand Medicaid, federal Medicare cuts and federal cuts due to sequestration, she said.
Federal cuts include about a $1 million loss of Medicaid revenue and another $1 million through the Affordable Care Act.
The losses from state and federal cuts are projected to be as much as $5 million.
An additional reason is less patients and particularly, paying or insured patients.
More than 70 percent of LMH’s patients are covered under Medicaid or Medicare, while 8 percent have no insurance. Less than 20 percent of patients have managed care reimbursements or other commercial insurance.
More than 13 percent of patients cannot pay for services amounting to a loss of more than $34 million of revenue.
“The plan allows us to respond to weakening in-patient volumes coupled with shrinking payments from both private and government insurance agencies,” LaRoque said. “This national trend requires us, along with most other hospitals across the country, to become more efficient and redefine the way care is delivered.”
Margaret Fisher can be reached at 252-559-1082 or Margaret.Fisher@Kinston.com. Follow her on Twitter @MargaretFishr.
Breakout box:
Breakdown of the 85 positions eliminated at LMH
15 laid off
26 vacant
19 relocated
12 took early retirement