Last week, Mid-Columbia Medical Center was forced by budget constraints to reduce its workforce by 11 positions, including both manager and staff-level jobs.
In addition, three individuals received a reduction in pay and 10 had their hours reduced, according to Dianne Storby, the hospital’s interim chief executive officer.
“This is the first time in over 20 years that MCMC will eliminate positions,” she said.
According to Storby, MCMC is experiencing budgetary pressures in three main areas: A change in electronic health records software that led to $3 million more in unpaid debt than estimated; a downturn in revenue during the cold winter months when fewer patients visited clinics; and uncertainty of Medicaid and Medicare reimbursements at the state and national levels.
Storby said MCMC began the transition to the Epic Health Records system, hosted by Oregon Health and Sciences University, a partner, in 2015. The clinics were provided with the new software during the summer months and the hospital in December of that year.
The new system allows medical providers access to patient records regardless of location — as long as that facility utilizes the same program, said Storby.
However, JoAnn Jones, interim chief financial officer for MCMC, said there turned out to be a problem in the estimation of risk tied to about $3 million in uncollected revenue from individuals and insurance providers.
The problem was not caught as early as it might have been due to the delay of the 2015 year-end audit to accommodate the changeover in software, said Jones.
As a result of this accounting challenge, Delap Accounting, a large firm in Portland that MCMC has worked with for several years, is further evaluating the projections. Once Delap completes the 2016 audit, the final numbers for uncollected revenue will be finalized.
“They could come up with different numbers,” said Jones.
Compounding the grim financial picture, said Storby, were the continuous snow and ice storms of winter that kept people at home. About 77 percent of MCMC’s revenue is derived from outpatient departments.
“We had a lot of people cancelling appointments because they just didn’t want to go out in that weather,” she said.
The third contributing factor to the decision to reduce the workforce, said Storby, is the uncertainty in reimbursement for Medicaid and Medicare services.
Oregon is currently grappling with a $882 million shortfall from an expansion of Medicaid services. How that will play out when reimbursement rates to medical providers are already lower than the cost of services is unknown, said Storby.
She said Congress has also stated its intent to overhaul the health care system -- and exactly what will happen at the national level is also unknown.
Because 73 percent of MCMC patients are covered by Medicaid or Medicare, Storby said it is important to reduce expenses.
She said MCMC tried to pare back costs before reducing the workforce by cutting back overtime, eliminating some open positions and paring back overhead and supply expenses.
However, she said those measures were not enough to eliminate the need for additional action.
Last fall, MCMC engaged a management consulting team that compared its workforce to that of other similar-sized hospitals. MCMC currently has 965 full and part-time workers, and that number also includes “casual” employees who have no guaranteed hours of work.
“That effort produced awareness that MCMC’s workforce structure needed to be adjusted if the hospital were to maintain a financially sound, full-service hospital with the resources required to invest in future technologies, our staff, and the emerging services that will best serve our community in the face of national and local changes in the health care industry,” said Storby.
She said employees who were laid off received severance pay and payment of accumulated vacation time based on hospital policy. In addition, affected workers were offered job transition assistance as well as re-employment services.
Storby said MCMC has not implemented a hiring freeze, but will continue to evaluate each position on a case by case basis.
She said the hospital’s focus will continue to be on the delivery of high quality patient care.