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Twenty-six losing jobs at KershawHealth

Posted: January 7, 2016 5:52 p.m.
Updated: January 8, 2016 1:00 a.m.
C-I file photo/

Just two months after being taken over by Capella Healthcare and MUSC Health, KershawHealth announced Wednesday it has initiated a workforce reduction plan which includes the elimination of 26 positions, reducing its workforce by approximately 3 percent.

According to a KershawHealth press release, the reduction is necessary as the hospital “continues to face fundamental challenges, including an ongoing decrease in patient volumes as well as changes related to healthcare reform and the evolution of healthcare delivery models.”

In the press release, KershawHealth officials said, “It has become clear that incurring ongoing financial losses like those experienced recently is simply not sustainable.”

Officials said other expense reductions, such as eliminating discretionary spending, have been put in place, but “adjusting staffing to better match existing patient volumes is the most appropriate way to bring costs in line.”

In addition, Kershaw Health officials said access to data and best practices from similar hospitals around the country “demonstrates that staffing levels have been higher than necessary to provide excellent patient care.”

“As difficult as it is to make decisions like this, our future depends on how quickly we are able to respond to changes dictated by our local market and adjust to meet the fundamental challenges in healthcare,” KershawHealth CEO Terry Gunn said in the press release.

In an email exchange Thursday, Gunn said the workforce reduction impacted all areas, including clinical and non-clinical/support staff.

“The reduction was spread pretty generally across the hospital,” Gunn said. “It was not concentrated in one specific area or service line. The reduction included both hourly and salaried employees (with) the highest level eliminated including directors.”

Gunn said he could not comment on the expected cost savings connected with the workforce reduction.

“First, because our finances are not private, but also because some reductions were part of larger cost-saving initiatives being implemented,” he said.

In the press release, Gunn said KershawHealth is working to assist each of the 26 employees in finding new positions as quickly as possible. He said each impacted employee has been provided with severance pay and a letter of reference, as well as a listing of regional job openings. Those needing additional help are also being provided career transition assistance. Also, each employee will continue to have access to resources through KershawHealth’s employee assistance program.

“As always, Kershaw Health’s top priority remains to provide the highest quality of patient care,” Gunn said. “This staffing reorganization will help to ensure KershawHealth remains financially stable and is able to sustain -- and even improve -- the outstanding care it provides. We are confident the community will continue to embrace KershawHealth and the excellent care our staff provides as we move dynamically into the future.”

KershawHealth has not had a formal workforce reduction since May 2011 when the hospital initiated a “financial improvement plan” where approximately 25 people were laid off. Five years earlier, in 2006, KershawHealth initiated a two-part “financial turnaround plan” which resulted in 26 full- and part-time positions being eliminated through attrition and the layoff of an additional 18 full-time and five part-time employees.

In October 2011, following that year’s reductions, KershawHealth employed 1,029 people. In October 2015, the month before Capella and MUSC’s takeover, KershawHealth employed 924 people. The difference includes 41 emergency management services (EMS) positions transferred to Kershaw County in summer 2015; the other 64 positions were eliminated during those four years through attrition.

October 2015’s financial report -- the last publically available now that KershawHealth is part of a for-profit enterprise -- stated a general operating loss of $894,000. Surgical cases, inpatient admissions and emergency department visits all decreased compared to October 2014 figures, resulting in a 6.6 percent reduction in gross revenue.

The month before, September 2015, Kershaw Health generated an operating loss of $1.5 million. September marked the end of the hospital’s fiscal year, and KershawHealth reported a fiscal year operating loss of $3.9 million and a $3 million decrease in net assets. For Fiscal Year 2014, KershawHealth suffered an estimated $3.5 million loss; it took a $3.6 million loss in Fiscal Year 2013.

KershawHealth has reported ongoing financial losses each month for many years, with occasional months in the black due primarily to disproportionate share hospital payments, cost settlements, grants and other non-operating revenue.

In addition to a national shift from inpatient to outpatient or “observation” status patients (those admitted to the hospital for under 48 hours), KershawHealth officials have often said they are having to deal with the state of South Carolina’s decision not to expand Medicaid. 

In July 2013, Kershaw Health Chief Financial Officer Mike Bunch told its board of trustees the hospital would lose an estimated $32 million in revenue and a comparable decrease in net assets by 2018 if the state held to its decision on Medicaid and if gross patient revenues stayed flat. While presented as a worst-case scenario, it prompted the board to begin working on a strategic plan; eliminating emergency medical services, which it transferred to the county in mid-2015; and, ultimately, seeking out a company to assist it financially which resulted in the Capella/MUSC Health lease/purchase deal.

 

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