4 top reasons for hospital layoffs

Blame it on the economy, the government, or even the hospital leaders themselves, but hospitals from coast to coast have reported recent layoffs. Hospitals have attributed the pink slips to reduced reimbursements, down patient volumes, more uncompensated care, and as critics of the hospitals have noted, high compensation packages for the few on top. The four top reasons for hospital layoffs include the following:

Reduced reimbursements: New Hampshire is an example of the effects of statewide reductions in reimbursements that result in hospital layoffs. Elliot Health System, Southern New Hampshire Medical Center, Wentworth-Douglass Hospital, and St. Joseph Hospital are among those in the state who have had to make the decision to lay off employees.

Uncompensated care: Providence Regional Medical Center Everett in Washington State could cut up to 175 jobs, that is, 4 percent of staff, the hospital announced yesterday. The hospital faces a budget shortfall of $10 million behind plan, Medicaid reimbursements that fell $15 million short this year, and reduced patient volumes, reports The Herald. However, the hospital also pointed to more uncompensated care, as it is on track to provide $70 million in uncompensated care this year, compared to $52 million in 2010 and $42 million in 2009 in community benefits, according to the article.

Switching to outpatient facility: Some hospitals are making the move from an inpatient to outpatient facility, as is the case with Erie (Pa.) Shriners Hospital for Children, which cut an unspecified number of employees, reports the Erie Times-News. The hospital is switching from a hospital to an ambulatory surgery center and outpatient clinic, according to the article.

High pay: As Memorial Health System in Colorado Springs faces a possible default with a $7 million loss this year, the hospital could eliminate up to 10 percent of its 4,000-employee work force, reports FierceHealthFinance. An opinion piece in The Colorado Springs Gazette points to the six-figure salaries of some of the physicians and consultants who earn more than $500,000. The article asks whether the debt and potential layoffs could be offset by the reduced pay of the leading earners.

For more information:
- read the The Herald article
- read the Erie Times-News article
- read the The Colorado Springs Gazette opinion piece

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