Following layoffs and the shutdown of two neighborhood clinics earlier this year, Grady Memorial Hospital is cutting an additional 120 positions as it faces a $17 million budget shortfall in just the first four months of 2011.
The cuts represent roughly 2 percent of Grady’s workforce and will include some nurses, spokesman Matt Gove said. They are part of a spate of cost-saving measures, including cutting back on overtime, improving cash collections and reducing patients’ length of stay. No services or programs will be reduced, he said.
“We’re at a point where decisions have to be made to ensure Grady’s doors will stay open,” said Thomas Dortch, a Grady corporate board member and chairman of the Fulton-DeKalb Hospital Authority board of trustees.
The move follows other recent cutbacks as Grady has tried to bridge a $20 million cut in local and federal dollars to care for the poor and uninsured, among other financial hurdles. So far this year, the safety net hospital has upped prescription drug co-pays, closed two health clinics and cut 100 jobs.
Like hospitals across the state, Grady has been hit by the economic downturn and rising number of unemployed and uninsured Georgians, Gove said. Emergency room visits -- a much more costly setting to treat patients in -- were up 11 percent through May of this year, compared with the same period in 2010, Gove said. Meanwhile, the number of outpatient visits at the hospital and neighborhood clinics has fallen.
If people can’t afford the minimum $10 co-pay at the clinics, they end up in the ER, he said.
“Where we are right now is unsustainable,.” Gove said.
Once on the brink of closing, Grady saw its first profit in years in 2009 after a group of Atlanta business leaders formed a corporate board to take over operations. The hospital finished last year with a nominal $208,000 loss but had projected a $15 million overall loss in 2011.
The quality of care won’t be hurt by the cuts, Dortch said, adding that he hopes this will be the last round of job cuts this year.
This is the latest cut that is hurting Grady’s mission to serve the poor, said Sen. Vincent Fort, D-Atlanta, who heads the Grady Coalition, a patient advocacy group. “They’re putting their money into their equipment but not into services,." he said.
Hospitals statewide are facing major financial issues, including a rising number of uninsured patients and bad debt, expected cuts to Medicare reimbursements, and the unknown impact of the new health care law.
Last week, Piedmont Healthcare announced 464 job cuts, totaling 5 percent of its workforce, in an effort to save $68 million. The cuts included 171 positions that were vacant or altered because of scheduling changes.
The health care industry has historically dragged behind the rest of the economy in feeling the impact of a recession, and the effects are just now hitting full force, said William Custer, a health care expert at Georgia State University.
More Georgia hospitals are likely to undergo major restructuring -- whether through job cuts or in other ways -- in the coming years, he said.
“If you have labor costs that are too high now," Custer said, "it may make sense to lower them now in the hopes if you need more people in the future, you can bring them on.”
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