City Hospital trimming costs, cutting positions

March 05, 2003|by CANDICE BOSELY

MARTINSBURG, W.Va. - In an attempt to prevent a sixth consecutive year of financial losses, City Hospital Inc. in Martinsburg is reducing expenses and the hours of some employees while eliminating the positions of 10 others, according to a hospital spokeswoman.

Teresa McCabe said the hospital needed to trim $3.2 million from its approximately $70 million budget after learning a requested increase in service fees was not granted.

Anyone who walks into the hospital will not see a difference in service, said Jon Applebaum, chief executive officer at the hospital.


"We have not eliminated any patient care services and will not reduce any," Applebaum said. "The quality of care will not be compromised and access to care will not be reduced."

No additional staff positions will be eliminated this year, Applebaum said. Wages and salaries make up more than half of the hospital's operating expenses, he added.

Hospital officials realized in December they needed to scrutinize the hospital's budget, McCabe said, when they learned that the state Health Care Authority in Charleston said City Hospital could increase its service rate by 9 percent. The rate applies to patients who do not pay by using a governmental service, such as Medicare or Medicaid.

City Hospital had asked for a rate increase of 21 percent, McCabe said.

To combat another year in the red, each department manager was asked to reduce his or her budget by 3 percent, McCabe said.

Also, the number of full-time equivalent employees needed to be reduced from 808 to 760. About $500,000 of the $3.2 million trimmed from the hospital's budget will be achieved through staffing, McCabe said.

Ten positions - from clinical, support and administrative services - will be eliminated, effective at the end of this month. Those employees could possibly transfer to other jobs at the hospital, Applebaum said.

Hours for other employees will be reduced, and positions currently filled by people who plan to retire will not be filled afterward, McCabe said.

Around $125,000 a year could be saved if doctors use medications that are less expensive - usually generic - than brand-name counterparts that accomplish the same goal, Applebaum said.

Another $280,000 could be saved every year if the hospital acquires an in-house MRI system rather than using a mobile one, Applebaum said.

Over the last five years, the hospital has incurred losses totaling $8 million, from no single source, McCabe said.

Federal and state reimbursements have been reduced.

Also, along with one other state - Minnesota - West Virginia hospitals must pay a provider tax, estimated at $1.8 million this year for City Hospital.

The hospital's medical malpractice liability insurance premium has doubled, from around $750,000 last year to a projected $1.5 million this year, McCabe said.

In future years, the hospital's success will depend on recruiting physicians, which will bring in more patients and increase the hospital's profitability, Applebaum said.

Last year, City Hospital admitted 7,142 patients. Another 126,000 were classified as outpatients and included people who came to the emergency room, had one-day surgeries or utilized outpatient services, McCabe said.

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