Hospital Impact: The challenge of addressing healthcare spending while preserving jobs

Filling out job application
In today's healthcare industry, a certain amount of administrative staff is necessary to ensure that organizations remain compliant with the sea of regulations that govern them, according to one health system executive. (Getty/AndreyPopov)
Barry Ronan headshot

Recently, an article appeared in Kaiser Health News that got my attention. Much of what is contained within the article, titled “Healthcare in America: An employment bonanza and a runaway-cost crisis,” rings true in Cumberland, Maryland.

Although Cumberland is located in the mountains of western Maryland and is nowhere near the size of cities cited in the article like Pittsburgh, Cleveland and St. Louis, my health system is the largest employer in the region. My preference has always been that we not be the largest employer in the region, but that distinction has been ours for at least the last 20 years. 

Over those past 20 years, the number of employees has remained fairly constant, but job roles have changed—especially during the last six years since we transitioned to value-based care. We have done a great job of transitioning care away from the acute care setting and moving it to where healthcare can be delivered most appropriately. We are coordinating and delivering care in physician offices, clinics, skilled nursing facilities, senior housing, churches and homeless shelters. 

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We have also been able to transition many of our staff from the bedside into new roles that support these efforts, which are saving millions of healthcare dollars. We have reduced emergency department visits, admissions, readmissions and ancillary utilization while making a difference in the lives of those with multiple co-morbidities—the sickest of the sick, if you will. 

Like any other hospital in the country, we are no different when it comes to “paying the wages of a whole bunch of people who aren’t involved in the delivery of care,” a quote in the article from a former Obama administration official. Unfortunately, we have no choice. Labor is a key component of what hospitals do, and there is a great deal of complexity in achieving success in this challenging industry.  

If we want to get paid for the care that is delivered in today’s world of denials, RAC audits and conditions of payment, as well as remain in compliance with the tens of thousands of regulations, requirements, statutes and laws that are specific to healthcare, we must have a necessary percentage of staff dedicated to understanding and interpreting an over-regulated industry. We have gone to great lengths to reduce the size of our administrative staff, and we are continually looking for ways to better align what we do with the appropriate staffing. 

It’s never easy, but moving away from a care delivery system that emphasized the volume of patient days, ED visits, surgeries and ancillary procedures has been a better way to at least address healthcare spending in western Maryland—and preserve much-need jobs in our region.

Barry Ronan is the president and CEO of Western Maryland Health System in Cumberland, Maryland.