Hutchinson Regional Medical Center announced to employees today that it is immediately reducing its workforce. Utilizing Action O-I, a comparative benchmarking tool of more than 750 healthcare institutions from around the country, management staff at Hutchinson Regional identified areas where department staffing levels are appropriate, under- and over-staffed.
“It’s very helpful to have a measurement tool like Action O-I to properly gauge staffing. In reviewing the data, it was clear that we have more employees than necessary,” said Kevin Miller, president and CEO of Hutchinson Regional. “While it’s extremely difficult to lay off employees, the long-term financial sustainability of the hospital depends on our being fiscally prudent. With reduced reimbursement rates, growing expenses, and increased competition, we simply can’t continue to over-staff our departments.”
Employee reductions have occurred at all levels throughout the organization and will dislocate 44 full-time and 11 part-time employees.
Hutchinson Regional patients should not expect any changes in the delivery or quality of hospital services. Providing quality healthcare is still the key mission of the organization and staffing has not been reduced to levels that would compromise the care received.
“Layoffs are never easy, but the hospital has been losing money. We have to make some changes that will allow us to improve the bottom line at a time of great uncertainty in health care,” said Bruce Buchanan, board chairman of Hutchinson Regional Medical Center.
The hospital ended its fiscal year on June 30, 2011, with a $5.54 million operating loss. Last March a similar number of employees were laid off and over the past several months the workforce has been reduced through attrition. In combination with other expense reductions, Hutchinson Regional is running a modest profit for its 2012 fiscal year.
“Like any business, we’re continually looking at how we can improve services, reduce our overhead, and invest in areas that will positively impact our revenue stream. As the community hospital serving a multi-county region, we must stay financially solvent,” Miller said.
The hospital’s strong balance sheet has allowed it to weather the losses, but Buchanan said that is not a long-term strategy.
“These reductions will make us more efficient and competitive,” Buchanan said. “We want to make sure we keep a locally owned hospital that thrives in a challenging environment.”
“The Action O-I productivity benchmarking tool allows every hospital department to compare their staffing levels against a peer group of comparable hospitals. By doing so, we feel comfortable that our new staffing levels are appropriate since many other high quality hospitals are able to staff at these same levels.” Miller said.
A severance package will be offered to displaced employees. They will also have access to assessment services, job counseling, job search workshops, and resume and interview preparation through the hospital’s partnership with Kansas Works.
“This is a tough time as we’re implementing changes that impact people. We recognize the importance of each team member and the challenges a work reduction poses to them and their families. It is vital during this difficult time to continue to work together as an organization and community to support one another,” Miller said.