Summa Health System laid off 58 workers this week as part of an ongoing effort to reduce expenses, President and Chief Executive Thomas J. Strauss confirmed on Wednesday.
Another 46 employees are having their hours reduced, Strauss said. In addition, 132 open positions are being left unfilled.
Seven nurses who provide bedside care are included in the layoffs.
Strauss said the health system expects to save $8.2 million from the moves, which affect less than 1 percent of its workforce of about 11,000 if partially and affiliated ventures are included.
“We don’t take this lightly,” Strauss said. “Our goal is to find meaningful positions for them in the system. This would be the last thing we choose to do.”
The workforce reduction affects primarily Summa’s Akron City and St. Thomas hospitals.
An intensive-care step-down unit at City Hospital is closing as part of the cost-cutting plan, Strauss said. Other layoffs are spread throughout the hospitals.
This week’s announcement marks Summa’s second round of layoffs this year as the health system contends with lower-than-expected revenues and prepares for federal health reform.
The health system laid off 54 employees in January to save nearly $4.5 million.
Both staffing cutbacks are part of Summa’s ongoing, 10-year performance improvement plan, which was launched in 2011 to reduce the health system’s expenses by about $966 million over the next decade.
The initiative started after an analysis showed impending changes from federal health-care reform — commonly called Obamacare — could cost Summa from $200 million to $950 million in revenue over 10 years.
The health system’s financial improvement plan includes everything from cutting supply costs and reducing the average length of stay for hospitalizations to earning federal incentive payments for implementing electronic medical records.
“The bottom line is we are doing things other than staff reductions,” Strauss said. “That’s the last thing we want to do.”
The workforce reduction isn’t related to a $250 million deal that will give Cincinnati-based Catholic Health Partners a minority ownership stake in Summa once finalized, Strauss said.
“If anything, that partnership would actually decrease the amount of reductions we have to have,” he said.
Summa’s operating revenues exceeded expenses by 1.2 percent for the first six months of this year, Strauss said. The goal is to achieve a 2.3 percent operating margin for the year.
“The good news is we’ve made nice progress here in the last couple months,” he said. “The goal is to come in on plan for the year and we hope we can still do that.”
No additional layoffs are planned at this time, Strauss said, “but you can never say never.”
Summa owns Akron City, St. Thomas, Barberton and Wadsworth-Rittman hospitals, as well as SummaCare insurance, a physician group and other businesses. The health system also has an ownership stake in Summa Western Reserve Hospital in Cuyahoga Falls.
Other health systems throughout the region are making budget cuts as they anticipate lower payments from Medicare and Medicaid. Hospitals here and nationwide also are preparing for an expected shift toward new payment strategies that reward hospitals financially for keeping people healthy rather than hospitalized.
The Cleveland Clinic told employees on Wednesday that staff cuts could be part of the Northeast Ohio health-care giant’s plans to reduce costs by $330 million in 2014.
Akron General Health System — Summit County’s second-largest employer — also laid off 132 employees in February as it contended with a $4 million loss in 2012 and anticipated future financial challenges from health-care reform. The layoffs were part of an overall workforce reduction of 250 full-time employees, according to a recent report from credit rating firm Standard & Poor’s.
Cheryl Powell can be reached at 330-996-3902 or cpowell@thebeaconjournal.com.