Forty-two workers are leaving Barton Hospital by mid-May, having signed up for a voluntary separation program that promises to send them off with a healthy severance package.
The staff reduction is part of a larger push to reduce costs and improve efficiency at the not-for-profit South Lake Tahoe hospital.
“Employees could apply to participate. We reviewed their applications, looked at how the department could operate without that position or with some alternate agreement, and if we could, we approved it,” said LeAnne Kankel, vice president of human relations at Barton Hospital.
About 50 of the hospital’s 900 employees applied for the voluntary separation program. Kankel declined to discuss incentive terms or the amount of anticipated savings for the hospital’s $130 million budget.
“We had people interested in retiring, people talking about going back to school for a degree or additional education, people who talked about themselves or their spouses opening a business,” Kankel said. “All positive things, and the people who volunteered will receive financial incentive to do whatever they were interested in.”
Affected employees must be off the job by May 16. Some positions might be refilled with part-time or lower skill category employees, but at least 30 of the 42 are expected to remain vacant.
“We’re still evaluating some of them,” Kankel said.
With key parts of the federal Patient Protection and Affordable Care Act taking effect, Barton Hospital hired consultant Novia Strategies to evaluate its operations and suggest ways to maximize efficiency. That analysis is expected to be done by July.
Kankel said the hospital has some preliminary recommendations in hand and decided to offer the voluntary separation program in conjunction with that review. The hospital offered a similar program four years ago for eligible retirees.
“We are constantly looking at expenses and ways we can provide the care we need to provide to patients and community members in the most efficient way possible. We really need to make certain we’re paying close attention to our expenses, labor being one of our biggest expenses. This definitely has given us an opportunity to do that, and allow employees to reach their goals also,” Kankel said.
Healthcare reforms will mean lower reimbursement rates for treating Medicare patients. Some of the policies bought from new health insurance exchanges set up to expand coverage also promise to pay hospitals less than policies bought elsewhere.
Other reforms require hospitals to improve patient outcomes and experiences.
“Putting focus there while staying efficient is a great challenge,” said Barton Hospital spokeswoman Monica Sciuto. She added that future challenges are not only a question of finances, but making sure the hospital “gets the appropriate people in the right seats to help people.”
In addition to complex reforms and lower reimbursements in the future, a struggling economy has meant more charity care for people who cannot afford medical service. Charity care at Barton increased from $4.9 million in 2010 to $6.9 million in 2013.
“We don’t want people to be scared,” Sciuto said about the voluntary staff reductions. “We want to make sure people know we’re being proactive in this new environment and making these changes so we can continue to offer the high quality care we have.”
California’s hospitals are dealing with major financial challenges, collectively facing $23 billion in reduced Medicare payments between now and 2023 as a result of the Affordable Care Act and other cuts Congress has approved, said Jan Emerson-Shea, spokeswoman for the California Hospital Association.
Medi-Cal, the state’s expanding version of Medicaid, has one of the lowest payment rates of any such program in the country, and hospitals that serve high volumes of Medicare, Medicaid and uninsured patients are set to see less supplemental funding to offset those challenges, Emerson-Shea said.
Struggling economies, charity care needs and California-specific industry mandates related to earthquake standards and nurse-to-patient ratios also pose challenges for hospitals, according to Emerson-Shea.
“There are just so many forces at play. All of those things come together that are putting significant pressure on hospitals across the state,” she said. “It’s a very difficult balancing act hospitals are having to do. But everybody knows there will be less money in the future, and that we’ll be expected to deliver higher quality care at lower costs.”