Akron General Medical Center is laying off about 30 workers as the hospital converts the majority of its patient rooms from double occupancy to private.
About 60 employees were notified on Wednesday that their positions are being eliminated, said Dr. Thomas “Tim” Stover, president and chief executive of Akron General Health System, the hospital’s owner. However, roughly half the affected employees are expected to remain with the hospital or health system in different jobs.
The hospital is contending with multimillion dollar losses as fewer patients nationally seek elective surgeries such as total joint replacements and gynecologic procedures, Stover said. Reduced payments from the federal Medicare program also are contributing to the financial struggles.
The transition to all-private rooms on the general medical-surgical floors allows Akron General to respond to declining admissions while reducing infection risks and creating a competitive edge, Stover said.
“We’re trying to take a decreased volume and do something that’s a patient satisfier,” Stover said.
Summa Health System, Akron General’s cross-town rival, doesn’t have all private rooms in its medical-surgical units at its area hospitals, spokeswoman Jennifer Farquhar said. “Any new construction or remodeling in our facilities will include all-private rooms.”
When the conversion to private rooms at Akron General is complete in the next few weeks, the number of inpatient beds will decline from 411 to 376.
Some areas of Akron General, including the intensive-care and maternity units, already offer private rooms and won’t be affected by the change, Stover said.
The inpatient psychiatric unit will continue to be semi-private, with patients sharing a room. The hospital is optimistic that all 24 affected registered nurses will be placed in open positions within the hospital or health system, a spokesman said.
Akron General estimates it will save an estimated $4 million from the staffing reduction and transition to private rooms.
The layoffs affect about 1 percent of Akron General Medical Center’s roughly 3,000 employees.
The workforce reduction doesn’t impact other parts of Akron General Health System, which also includes Edwin Shaw Rehabilitation Institute in Cuyahoga Falls, Lodi Community Hospital, Visiting Nurse Service and Affiliates, three Health & Wellness centers and physician practices throughout the region.
The health system is among the region’s largest employers, with nearly 5,000 employees.
Earlier this year, Akron General Health System laid off 132 workers as part of a workforce reduction of 250 full-time employees. The majority of the remaining positions were eliminated through attrition.
Financial downgrade
National bond rating firm Standard & Poor’s recently downgraded the health system’s creditworthiness based on “challenged operations,” including a 9.7 percent decline in admissions and nearly 7 percent drop in surgeries for the first six months of this year compared to the same period in 2012.
The health system posted an operating loss of $13.6 million on revenues of $283.3 million during the first six months of this year, according to Standard & Poor’s.
Faced with high deductibles that force them to pay $1,000 or more before their care is covered by their insurance plan, consumers increasingly are delaying medical care, Stover said.
“People are limping rather than undergoing surgery,” he said.
Acquisition in works
The latest move comes as Akron General continues to move forward with a tentative deal to be acquired by a joint venture between the Cleveland Clinic and the for-profit national hospital chain Community Health Systems of Tennessee.
Health systems throughout Northeast Ohio and nationwide are forging partnerships and slashing budgets in anticipatetion of looming changes from federal health-care reform.
Cross-town rival Summa Health System is finalizing its own $250 million deal that will give Cincinnati-based Catholic Health Partners a minority ownership stake in the Akron-area health system.
Summa laid off 58 workers last week as part of an ongoing effort to reduce expenses. Another 46 employees are having their hours reduced, and 132 open positions are being left unfilled.
Cleveland Clinic also told employees last week that staff cuts could be part of the Northeast Ohio health-care giant’s plans to reduce costs by $330 million in 2014.
Cheryl Powell can be reached at 330-996-3902 or cpowell@thebeaconjournal.com. Follow Powell on Twitter at twitter.com/abjcherylpowell.