Children's Hospitals and Clinics of Minnesota plans deep cuts

Children's Hospitals and Clinics of Minnesota will cut between 200 and 250 jobs by November, a reduction that could total as much as 8 percent of its total workforce.

The cuts were detailed in a letter Children's Chief Operating Officer David Overman sent to employees late last month, according to the St. Paul Pioneer-Press.

The hospital reported a 15.5 percent decline in patient census during the second quarter of 2010 compared to the same period last year. It also cited a one-day strike by nurses in June, and increasing expenses for a $7.3 million operating loss for the quarter. Children's expects to report a negative operating margin for all of 2010.

Children's is not alone among the state's hospitals. The Minnesota Hospital Association reported that admissions were down 4.4 percent during the first quarter of 2010. However the system is under an increasing burden: Forty-four percent of its patients are covered by Medicaid, compared to 38 percent a year ago. That trend, coupled with cuts in reimbursement, have aggravated the strain on the bottom line, according to hospital officials. Medicaid pays providers only about 80 percent of their costs, the Associated Press reports.

Overman's letter suggested that attempts would be made to cut the jobs via attrition and early retirements. Several service lines, including an inpatient hematology/oncology service, may also be cut.

Children's has campuses in Minneapolis and St. Paul, and about 3,150 employees.

For more:
- read the St. Paul Pioneer-Press article
- here's the Associated Press article