Employees at Westlake Regional Hospital and a number of primary care centers learned this week they are facing layoffs or dramatic reductions in pay and benefits.
Hospital officials are developing a plan to reduce costs by $2 million a year to show that it can remain viable if given an infusion of cash, which it hopes to get from the county government.
Two new hospital board members took the reigns in proposing cost-cutting measures and the other three board members were slow to agree. Craig Pyles and Richard Grant, who were just appointed to the hospital board Tuesday night, spent two days going over financials with hospital CFO Tammy Curry before proposing a plan at a special called meeting Thursday night.
Pyles called the special meeting, which is allowed under the hospital district board’s bylaws. While Pyles was able to reflect the urgency of the situation at Westlake, the numbers he used were deduced by looking at two months of income and averaging that for the year. Like any other business, the medical industry has months of higher revenue than others and the figures Pyles used were questioned by Ken Doran, president of Spectrum Health Partners.
While his numbers were questioned, the reality of the situation was not.
“There is no easy way out of it,” Pyles said. “We are running as a big-time hospital and we are not.”
Pyles said the hospital would make payroll last Friday but “I don’t know about the next one…We’re broke.” He said he talked personally with the bankers involved in $12.5 million in loans to the hospital and they are holding off, but “they are worried,” he said, adding that they want a plan “and they want it quick.”
Pyles made a motion to look at reducing staff by 30 to 35 full time positions, cutting salaries as much as 10 to 15 percent, eliminating contributions for life, dental and disability insurance, and reducing health insurance contributions to 50 percent.
Jim Evans, board chairman, said they would need to address what impact the cuts would have on services. Doran, who was attending the meeting via a telephone speaker, said nobody had an interest in turning the hospital into a Band-aid station and the board needed to decide if it was going to provide services it currently provides or become nothing more than a Band-aid station.
Pyles disagreed, saying the option is “do you want something or do you want nothing.”
Rodger Klein, interim CEO, said he believes the number of cuts in full-time employees could make changes in clinical programs and that would need to be discussed with the state. He also said he would review how the cuts would impact patient care and patient safety “and that’s a line I would not cross.”
Board member Bruce White said he did not think cuts should be limited to what Pyles was calling for and they should look at different options.
Evans said employee cuts may be a good idea in “a normal business, but we are not in a normal business.”
But Pyles stressed the need to do something now to keep the banks from closing the doors.
Evans said “we” are in the process of developing a plan, but then he and Klein continued with a conversation about who was supposed to be developing that plan. Evans said he thought it was understood Klein was developing the plan. This conversation was taking place two weeks after the board learned that the hospital no longer had a sale plan on the table and must survive on its own revenue.
Finally, after agreeing that the CEO would “look at” the affects of the potential cuts proposed by Pyles, the board voted unanimously to consider the cuts.
The hospital board then when into an executive session to discuss litigation, but Evans apparently had a change of heart while he was gone. The change could have come from a conversation in the hall with fiscal court magistrate Billy Rowe, who according to a source, told Evans the county would not be providing any help if the hospital board did not develop a firm plan to show cost cutting measures. The fiscal court has a special called meeting scheduled for Tuesday.
While the hospital board was in the executive session, County Judge Executive Ann Melton, who was in attendance at the public meeting, was clear on the fiscal court’s intentions when questioned by the Community Voice.
“They will not get a vote if we don’t get something in writing that shows a significant reduction and how this hospital can sustain itself,” she said.
When the board came back from executive session, Evans asked Klein how quickly he could develop an analysis and he said he would complete it Friday. He agreed to get the projections to board members Friday so they would have time to review it and the board agreed to call a special meeting for Tuesday at noon.
NO COMMENT FROM EVANS
Following the meeting, the Community Voice asked Evans what plan he or the staff had been working on since they learned two weeks ago that the hospital would not sale. Evans said he had no comment.
Also during the special called meeting, Spectrum Health Partners announced it would resign effective 30 days from their notice. As of Aug. 15, the hospital district owes Spectrum $265,469 in fees, some due as far back as April, according to the letter of resignation from Spectrum President Ken Doran.
The meeting was moved from the usual location of the board room to the cafeteria because of the size of the crowd. Community members including a number of hospital employees filled the cafeteria.
The hospital district board will meet in a special called meeting at noon on Tuesday. The meeting will be held at the hospital at 901 Westlake Drive.
The Adair County Fiscal Court will meet in a special called meeting to discuss the hospital at 5 p.m. Tuesday. The meeting will be held at the courthouse annex basement, 424 Public Square.
By Sharon Burton