June 30, 2006
Genesis Announces Staff Adjustment
DAVENPORT, Iowa -- Genesis Health System officials today announced that approximately 100 positions will be eliminated across the system. The total represents about 2% of the total Genesis workforce of slightly more than 5,000 full-time, part-time and per diem employees.
In addition to the reduction of positions, about 40 workers will have their hours reduced.
More than half of the jobs eliminated will result from the closure of two service organizations: the Transitional Skilled Unit at Genesis Medical Center, Davenport and Private Care, a private duty nurse service offered by the Genesis home health organization. The effective date of these closures will be dictated by patient safety and regulations regarding public notice.
Genesis spokesman Ken Croken said the exact number of people who eventually leave Genesis as a result of this action is uncertain because the process of matching affected employees with other open positions begins today. There are currently 200 positions open within the health system, including staff openings at the Clarissa C. Cook Hospice House and other Visiting Nurse Association services.
“The challenge will be finding the right skills fit,” Croken explained. “But, it is our intention to retain as many of our outstanding Genesis workers as possible within the larger organization.”
Anyone who leaves Genesis as a result of this action will be provided with a severance payment, if qualified. They also will be eligible for priority recall on a system-wide basis.
Croken said the staff adjustments are necessary in reaction to rising costs and declining and delayed reimbursements.
“Although Genesis remains financially sound, the combined impact of steadily rising costs and declining reimbursements has created a projected financial imbalance that we must recognize and address. We deeply regret the need for this adjustment in our staff and the adverse effect it will have on some of our outstanding Genesis employees and their families. However, we must take decisive action to reduce costs and ensure fiscal vitality in order to maintain our commitment to provide quality, compassionate health services to all those in need.”
Genesis officials estimate that health care costs will rise as much as 6% in the coming fiscal year. At the same time, reimbursements from Medicare and Medicaid are expected to drop by 2% or more. Specifically, the estimated impact on Genesis of new regulations promulgated by the Center for Medicare and Medicaid Services represents a $3.3 million drop in reimbursements in the coming fiscal year. “The new Medicare reimbursement rules only compound the inherent inequity of the Medicare program that reimburses Iowa health care providers at rates that are among the lowest in the nation,” Croken said.
At the state level, downward adjustments and Medicaid reimbursements paid to Genesis could negate the benefit of a recent Medicaid increase voted by the state legislature. “While somewhat higher than Iowa, Illinois Medicaid reimbursement rates provide little relief since the program is plagued by protracted delays in payment that strain the cash flow of hospitals and other health care providers.’’
Croken said that most government health insurance programs already pay less-than-cost rates. “Any reduction to these already inadequate reimbursements only makes a bad situation worse,’’ he said.
Genesis officials assure the public that this staff adjustment will not diminish the award-winning quality of Genesis care.
“The reduction of staff is driven by shifting patient volumes,” Croken explained. “In other words, we are reducing staff in non-clinical areas and in clinical areas where patient volumes are already low or we plan to discontinue the service altogether.”
On a national basis, health care utilization is changing. Hospitals are reporting stable or declining in-patient volumes as more patients can be treated and can receive procedures on an outpatient basis. Also, as individuals pay more from their own pockets toward the cost of health insurance, some are delaying elective procedures until after they have met their deductibles.
Genesis, like all hospitals, is also experiencing a reduction in patient length of stay. Improved technology and efficiency gains allow patients to leave earlier. While this is good for the patient, it reduces days of patient use, which requires hospitals to adjust staffing accordingly.
Hospitals and health systems across the country, including Genesis, are also impacted by the rising costs of uncompensated care. In fiscal year 2006, Genesis provided more than $31 million in uncompensated care, including $8.5 million in charity care.
According to Croken, the rationale for closing the Transitional Skilled Unit and Private Care operations is two-fold.
“First and foremost, these services are both heavily subsidized. Of course, our mission requires that we continue to subsidize many other health services that are not self-supporting. But, in the case of both the TSU and Private Care, there are alternative resources in the community to provide equivalent services. So, our mission compels us to re-direct our support to other, more essential services.”
Elsewhere throughout the system, the process of identifying the specific jobs to be eliminated was an analysis of shifting patient volumes, revenues and expenses against current staffing levels. As always, seniority was the determinative factor in identifying which employees were affected within departments and job categories.
“Our Genesis commitment to serving the evolving health care needs of the communities we serve is now nearly 150 years old. The steps we take today are designed to help ensure the economic vitality of the Quad Cities’ only local health care system for the next 150 years,” Croken said.
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