CHEYENNE — According to a source close to the matter, Cheyenne Regional Medical Center has laid off eight administrative employees to brace for cuts in Medicare reimbursements, including the hospital's director of marketing.
The hospital claims the upcoming payment cuts required to make the Affordable Care Act work will cost the hospital millions. Medicare is expected to make 2 percent cuts to hospital reimbursements, according to the hospital. Additionally, indigent hospital users who don't pay bills have been on the rise while Medicaid payments have not been.
"In our state they decided not to do it (the optional Medicaid expansion)
which is really going to create a lot of stress on Wyoming hospitals," CRMC CEO Dr. John Lucas told the Business Report.
Another factor the hospital has considered in making staffing cutbacks has been the looming effects of insurance exchanges. The exchanges will force hospitals and insurance companies to be transparent with pricing, meaning CRMC, who admits to being more expensive than some regional hospitals, will face even more competition.
"If we're gonna play in that sandbox, we
have to be equal to or better than our competition regionally," Lucas said.
And with fully informed consumers through insurance exchanges, prices at the hospital may need to go down even as back-end prices rise.
"Those exchanges will sell insurance with cost
info, so when individuals or small businesses go to the exchanges it'll be shopping being
fully informed on pricing data," Lucas said. "So that puts pressure on us to drop
our prices for that business."
Altogether, the hospital expects it needs to trim down operating costs by $35 million in cuts over the next three years to absorb the damage. The change represents a 15 percent cut for the hospital.
Beyond immediate layoffs, further cuts will be achieved by consolidating job positions outside of clinical roles, increasing clinical efficiency and more selectively purchasing supplies. The actions all form part of a 10-point plan that will be completed next week, Lucas said.
The hospital described the jobs cut as "four vice presidents and four leadership positions." A hospital spokesperson said today the hospital is not releasing the names or exact job titles of those who were laid off.
But CRMC stresses the jobs are not being shed from clinical positions. However, in addition to the eight jobs that were cut, the hospital plans to leave 10 staff positions open that have been vacated through attrition in areas like fundraising and finance.
For more on this story and the regional hospital effect, watch for the March print edition of the Wyoming Business Report.
For more Daily news click here and look under 'Breaking News'