Financial squeeze results in layoffs at CVPH

— In an attempt to bolster its financial position in 2013 and beyond, CVPH Medical Center laid off 17 employees.

A total of 9 of them were management and the remaining 8 were hourly staff members.

Cuts to reimbursement and a nationwide trend of fewer admissions and outpatient services contributed to a shortfall in revenue.

“This step is necessary in order to help sustain our medical center in the future,” said CVPH Medical Center President Stephens Mundy. “Regardless, it is one of the most difficult decisions we have had to make in my 10 years at CVPH.”

Hospital officials looked throughout the organization in making the decision. The management cuts included at least one top-level administrator.

The hourly employees included positions in information technology, human resources and finances. No direct caregivers or nurses lost their jobs as hospital officials were careful no to impact patient care.

The 17 individuals laid off will receive severance pay and health insurance through the end of the year along with assistance in finding other employment.

Hospital officials blamed the move on a shortfall that exceeded $400,000, meaning that, through September, CVPH operating expenses exceeded operating revenues by more than $400,000. That was largely due to cuts in reimbursement, fewer admissions and reduced use of outpatient services.

That figure would have been far greater if CVPH had not qualified for a $3.2 million federal Meaningful Use grant as part of a national program to fund development of an electronic medical record system. For accounting purposes, the grant was credited as operating revenue.

Mundy said the systemic changes in health care and a number of short-term business cycle factors created a “perfect storm” that undermined CVPH’s finances after three of the stronger financial years in the medical center’s history.

“Over the past several months we have initiated a number of measures to reduce future expenses,” Mundy said. “Physician recruitment is working to fill positions that opened unexpectedly this year. The pending affiliation with Fletcher Allen Partners will generate additional savings through group purchasing.”

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