Lakeland Regional Medical Center announced today plans for a reorganization that will reduce 277 positions from its workforce of 4,636. This affects 133 people currently working at the hospital; the other positions are vacant and will not be filled.
LRMC’s A2 bond rating by Moody’s Investors Service has been threatened the past two years by the challenges to financial security. The May 2011 rating report notes the hospital’s low operating margin of .3% compared to the 5% considered healthy for A2-rated healthcare organizations. The report also references Polk County’s weak demographics, including high unemployment rate (11%, above the national average); and high and increasing Medicaid exposure as the county’s safety net provider. The hospital’s aging facility was another area of concern. The report outlook states that the inability to show improvement will result in a negative rating.
LRMC President and CEO Elaine Thompson, PhD, stated, “Employers, the government, and insurers rightfully expect that hospitals will deliver high quality care at the lowest possible cost. LRMC is taking a leadership position to lower costs and provide quality care at the value our community deserves. We must ensure this hospital’s ability to serve patients for the long-term.” She added, “Throughout the nation, the demand for value is seen in federal reimbursement changes that will cost us $25 million over the next several years. Our state budget calls for cuts that will potentially cost us another $15 million, starting in July. We see the need for lower costs as we watch the growing rates of insurance premiums, the number of uninsured patients and those struggling to make co-pays.”
Thompson noted that LRMC has long been considered a high quality, low cost provider and has proactively reduced non-salary expense. The hospital has renegotiated with suppliers to achieve savings of more than $9.1 million over two years; is analyzing processes in every area to streamline and be more efficient; and is investing in computer systems to increase business efficiency, as well as to promote patient safety and quality care. Every expense is being carefully analyzed, with attempts made to renegotiate.
A reduction in force is necessary to further lower expenses and ensure the organization’s long-term ability to provide high quality care at the lowest cost. The hospital is steadfast in its commitment to safe, quality care, and all vacant positions will be evaluated; those directly supporting the hospital’s patient care mission will continue to be filled. Management positions have been affected at a rate higher than that of staff positions.
“It is difficult to make personnel reductions. We know that each member of our team is hard-working and cares deeply about our patients and their families. However, as difficult as this decision is, it is vital to ensure that our hospital remains viable for the community, and also for the 4,500 employees who will continue to provide exceptional care for our patients,” said Thompson.