A healthcare CEO in Charleston, West Virginia, took to YouTube to explain his hospital system’s decision to slash 300 jobs.
In a 7-minute presentation, Charleston Area Medical Center (CAMC) Health System CEO David Ramsey laid out the environment that put his organization on track to lose more than $40 million in 2017:
- While Medicaid expansion has benefited West Virginia broadly and led more previously uninsured individuals to get care, a reduction in Medicare reimbursement rates, combined with a decrease in the percentage of commercially insured patients, caused a sharp drop in the system’s revenues.
- Rural areas, including those served by CAMC, have felt the pinch of the ongoing nursing shortage more strongly than other areas.
- Rising costs for drugs and technology have put pressure on margins.
CAMC also plans to shutter several programs operating at less than maximal efficiency, according to the video. “While I wish we did not have to make these changes, all of these programs serve very few patients or employees and do not cover their costs,” said Ramsey.
The hospital had warned of the potential for impending job and program cuts back in January, citing a goal of $20 million in profit for the year, per the Charleston Gazette-Mail.
The system joins a wave of hospitals that have recently sought to shed jobs in order to make their budget numbers work:
- In April, Brigham and Women’s offered 1,600 employees voluntary buyouts in a bid to avoid layoffs. The hospital’s parent organization, Partners HealthCare, subsequently announced a $600 million cost-cutting initiative.
- Earlier in July, St. Francis Hospital in Tennessee announced it would lay off 55 employees, in addition to reducing hours for an indeterminate number of its 2,500 employees.
- Also in July, Oregon’s largest private-sector employer, Providence Health & Services, announced it would be laying workers off as part of a larger effort in response to an operating loss that topped $255 million in 2016.
- In Belleville, Washington, St. Elizabeth’s Hospital announced a workforce realignment that cost 21 jobs in late June.
Here's Ramsey's video: