Charleston Area Medical Center Health System plans to eliminate 300 positions by the end of 2017.
Dave Ramsey, the hospital system’s CEO, announced the job cuts in a seven-minute YouTube video on Wednesday.
“Regrettably, there is no end in sight for West Virginia’s economic situation, poor reimbursement from governmental insurance, rising cost of drugs and technology, the nursing shortage and the cost of caring for government-insured patients,” he said. “After the first five months of 2017, CAMC’s operations were on course to lose more than $40 million. In the past several months, the leadership of CAMC has been working on a plan to stop the financial losses and work toward a sustainable future.”
Ramsey said cuts will be based on department productivity, although he did not elaborate on how productivity will be measured. Dale Witte, hospital spokesman, said Ramsey would not do a phone interview.
Ramsey said in the video that CAMC will “be requiring that each department and cost center maintain 100 percent productivity beginning ... Aug. 1, 2017.”
“While we have been working toward the goal for several years, not all departments have reached it or maintained it,” he said. “Now everyone must do so. We anticipate the increased productivity will remove approximately 300 employees from the CAMC Health System. With the hiring freeze that was implemented in January, 56 of those 300 positions have already been removed. We are hopeful that the remaining position reductions will take place through attrition.”
CAMC employs about 7,000 people, according to its Twitter account.
CAMC also is closing programs, including the Dean Ornish heart-health program, which closed this month; the pulmonary rehab program, which will close in October; the Cross Lanes pharmacy, which will close next month; and “realigning the dental and fertility centers with other existing departments.” CAMC will close the Lighthouse Childcare and Development Center by July 2018, Ramsey said.
“While I wish we did not have to make these changes, all of these programs serve very few patients or employees and do not cover their costs,” he said.
Ramsey also said that “commercially insured patients now make up only 17 percent of our patients, down from 20 percent of our patients in 2012,” a $50 million decrease to CAMC’s bottom line. He noted that, when the Affordable Care Act was passed, Medicare reimbursement rates decreased to pay for Medicaid expansion.
In a June email to employees, Ramsey said, “West Virginia has benefited greatly from the Medicaid expansion.” Ramsey urged employees to ask their senators to oppose a Republican replacement for the ACA.
At a forum held in opposition to the GOP plan in March, Bob Whitler, of CAMC and Partners in Health Network, said that, at CAMC, uncompensated care, which is charity and bad debt combined, declined from 5.69 percent of gross revenue in 2013 to 2.6 percent in 2015 and was 3.29 percent in 2016.
In January, Ramsey said the hospital system might cut programs and services to meet a goal of $20 million in profit for the year.
In a letter to the state’s congressional representatives Wednesday, Kanawha Commission President Kent Carper asked them not to make any “further damaging decisions” and said that CAMC is one of the county’s largest employers.