Local Hospitals Avoid National Trend of Healthcare Layoffs

July 11, 2010    

Original Article: Memphis Business Journal

by: Christopher Sheffield

While hospital systems nationally have faced some of the most significant staffing cuts in several years, that is a trend apparently not being played out in Memphis.

Hospitals nationwide have been hammered by decreases in patient volumes and reimbursements from both private insurance and government programs. But local hospital executives and staffing companies say Memphis is largely bypassing the trend of wholesale layoffs by selective cuts and leaving certain positions unfilled.

“Volumes are off a bit here and there, so we just make normal adjustments,” says Everett Liddell, chief human resources officer for Saint Francis Healthcare, noting that Saint Francis-Memphis was forced to lay off less than 25 non-clinical employees in 2008.

“But that’s it,” he says. “We’ve adjusted from there and kept going and not had to do anything like that again.”

Saint Francis and most of its competitors in Memphis appear to be avoiding the national trend.

A June 21 story in American Medical News, a publication of the American Medical Association, noted that in April there were 18 mass layoff events — cuts of 50 or more employees — at U.S. hospitals affecting 1,967 employees. That was the third highest since 21 in July 2009 and 30 in September 2005. Cuts in 2010 are on track to surpass the 2009 record of 152 mass layoffs and affect far more than 2005’s record of 13,282 employees.

The article highlighted job cuts at hospitals in Miami, Greenville, S.C., Princeton, N.J., Phoenix and Fresno, Calif.

Sarah Wheaton, a compensation analyst with Kansas City, Mo.-based Compdata Surveys, closely follows staffing issues in health care as part of providing salary and benefits data to the industry.

She says hospitals and health care overall have work force challenges “that have only been exacerbated by the recession.”

She cited a June report by the American Hospital Association that said 70% of hospitals were reporting fewer patient visits and elective surgeries, based on a survey of 572 hospitals collected between March and April. On top of that, the temporary increase in Medicaid matching funds runs out at the end of 2010, and there is the uncertainty of health care reform.

Liddell says there are many factors that can necessitate a hospital being forced to lay off staff, including local demographics, the size of the community, competition and size of the hospital and/or system.

Carol Ross-Spang, senior vice president of human resources for Methodist Le Bonheur Healthcare Inc., says layoffs are a last resort.

“Like every other employer, we are being good stewards of our dollars,” says Ross-Spang. “We look at any positions that are open to check and double check if it’s a position we need to fill or (if) there are other creative ways to get the work done.”

Ross-Spang says Methodist has not had any sizable layoffs since fall 2008 when it cut less than 100 jobs “and some of them might have been re-employed in another part of the organization,” she says.

According to Memphis Business Journal research for 2007, 2008 and 2009, employment among hospitals in Shelby County has largely increased or remained steady.

The most notable exception was Methodist Healthcare, where total full-time employment dropped by 1,106 to 6,281 for its six hospitals in Shelby County, including 454 jobs at Methodist University Hospital between 2008 and 2009.

Methodist spokesman Ruth Ann Hale says the drop largely had to do with discrepancies in calculating employment by different areas and how that was reported. It has since gone to a single reporting source to ensure accuracy, she says.

Employment at Baptist Memorial Health Care Corp.’s five hospitals in Shelby County increased between 2007 and 2008 by 317 to 5,302 and was unchanged in 2009.

Saint Francis Healthcare showed steady employment increases between 2007 and 2009 at its two hospitals, with total employment hitting 2,222 in 2009.

Saint Francis-Bartlett spokesman Derrick Venckus says employment there is expected to grow another 155 when the hospital completes a 96-bed addition set to start construction probably before year-end. Total full-time employment at the Bartlett hospital has increased from 331 in 2007 to 430 in 2009.

“We’ve been fortunate we’ve continued to grow,” he says. “At Saint Francis we’ve had no layoffs due to the economy.”

Delta Medical Center’s total full-time employment was unchanged for three straight years at 423.

However, CEO Mary Hammons says the hospital is currently at almost full employment with total employment approaching 600, counting full- and part-time positions. “We only have four to six open positions in the hospital,” Hammons says. “We’re very full.”

While the economy has been cited for contributing to layoffs elsewhere, Hammons says the biggest impact for Delta has been a drop in turnover.

“Nobody wants to move,” she says. “If you change jobs you are the new person on the totem pole.”

Hammons says Delta has avoided layoffs by being aggressive in controlling expenses, which included salary raises.

“For 2010 we all accepted a freeze to prevent any layoffs,” she says. “That’s what we felt was a proactive step. We’re all in this together.”

Original Article: Memphis Business Journal

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