Grady Memorial Hospital will cut 100 jobs and may consider trimming programs to help bridge a $25 million shortfall in federal funding, hospital officials said.
The layoffs, which will not include doctors or nurses, are expected to save Grady roughly $6 million, though it’s unclear where the rest of the gap will be made up -- whether in program reductions or new sources of revenue, spokesman Matt Gove said.
Grady is seeing one of its largest-ever reductions in government funding at a time when the recession has spurred greater numbers of uninsured patients, CEO Michael Young told board members at a meeting Monday. “We see patients in tears” who have lost their health coverage, he said.
Some 40 percent to 45 percent of the layoffs will be the result of more efficient operations created by the hospital’s new electronic medical records system, which was launched in November, Young said. Some duties such as data input are now automatic, he said, and the rest of the cuts will come from other support positions.
The layoffs likely will happen over the next several weeks, Young said.
In November, the last data available, the hospital had about 4,800 employees.
The move follows a decrease in money to pay for poor and uninsured patients from the Indigent Care Trust Fund to $63 million, down from roughly $88 million in 2010, Gove said. Administered through the state, the federal money is based on how much indigent care is provided versus payments received.
In calculating Grady's portion, 2009 was used as a baseline. The hospital saw a major turnaround that year, however, by increasing cash collections by $57 million and renegotiating vendor and supplier contracts, Gove said. It also was able to improve the bottom line by buying new, more efficient equipment with private donations -- totaling more than $300 million in commitments, he said.
Besides less money from the indigent care fund, Grady also is facing a $3 million decrease in support from Fulton County, and DeKalb County is floating a $1.5 million cut in hospital funding, Young said.
The hospital has been hit financially in a number of ways over the past year, experiencing an $11.5 million loss to its bottom line year-to-date through November in 2010, said Sue McCarthy, the hospital's chief financial officer. “Our labor costs have gone up very significantly.”
A big driver of the increase in labor costs was a 1.4 percent increase in the length of stay for patients through November of last year, the latest data available, McCarthy said.
Meanwhile, during that same period, the hospital saw a roughly 1 percent increase in uninsured patients and 1 percent drop in insured patients -- costing a collective $13 million, Young said, adding that even small numbers have a big impact.
The hospital also has added around 300 employees in the past year, including temporary and contract workers to set up an electronic medical records system and 50 nurses to staff the new Marcus Stroke & Neuroscience Center, Gove said.
Gove added that administrators will continue to meet with staff to brainstorm other cost-saving ideas in coming weeks.
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