BJC: Layoffs necessary for survival

“There is no easy way to explain or to try to paint a pretty picture about what happened last week,” conceded Charles Blair, who chairs the facility’s governing authority.

The layoffs, 75-80 percent of which were termed “managerial” and 20-25 percent “clinical,” are expected — in conjunction with scheduling changes and elimination of overtime — to save about $2 million a year, according to Ray Leadbetter, the facility’s interim chief financial officer, who predicted that the facility could be “very close to running in the black” by the end of February.

“Guys, it’s like this all over society,” added member Jimmy Hooper concerning the layoffs. “I’ve seen grown men crying, throwing up their hands and slamming doors. It’s dire out there.”

“The initiative is to reduce our operating expenditures by an amount equal to 20 percent of our expenditures for the first six months of the year,” explained CEO Jim Yarborough. He called the experience “the most difficult time in my 30 years” and said the decisions “were the most difficult I’ve ever had to make.”

It was more difficult for employees, most of whom had no warning until they were summoned to meetings attended by Leadbetter, Marilyn Anglin, director of human resources; and their department manager. Leadbetter explained the reason for the layoffs, employees were handed a severance notice and a last paycheck, informed of the potential for filing for unemployment compensation, told to turn their badges in and escorted out of the facility.

No severance packages were offered.

Senior management met with all department managers to determine how to achieve the 20 percent cost reduction “with minimal or no impact on the quality of service,” Yarborough said.

“Our volumes, patient visits, admissions, radiology procedures, lab procedures, etc., are down,” the CEO continued. “When you look at the downturn in the overall work load, we should be able to do that work with less people.

“We focused on the expenses of each department, and of course a big part of the expense is always staff, so staff is a big part of the reduction. I can’t overemphasize how difficult the decisions have been.”

Management had been on four-day weeks (with commiserate reduction in pay) since August, said Henry Slocum, among those laid off in spite of 48 years of service with the hospital.

Other measures aimed at reducing costs or increasing income were also instituted or being considered.

The facility implemented a “point of service” collection system designed to trim bad debt in the emergency room that Leadbetter estimates will improve cash flow by $300,000 annually. It terminated some contracts and entered others, has begun serious discussions with a firm to get a “temporary general surgeon,” one of the key vacant staff positions; and is considering the creation of an acute/urgent care clinic to provide an alternative to the emergency room for non-emergency care.

At Monday’s meeting, the board voted to give its finance and credentials committees the authority to act if the company’s prospect for the general surgeon accepts the job. Officials have asked for historical data on surgeries, numbers on out-migration of patients to other hospitals and toured the available offices.

“I think this holds a lot of promise,” said Charles Blair, chairman.

According to a news release, last year BJC Medical Center provided more than $1.3 million in charity care and had bad debts of more than $5 million - and the trends are worsening.