With falling profits, rising operating expenses, and more patients. Many facilities are looking for ways to cut. Nash Health Care System in NC is looking to replace Travel Nurses with full-time employees.
Spring Hope Enterprise, Spring Hope, NC - May 28, 2008
By KEN MURCHISON
Nash Health Care System lost money in 2007 and that could mean the loss of as many as 80 or more jobs.
According to the 2007 annual report, Nash Health Care had $182.5 million in total revenue while incurring $183 million in total operating expenses. That resulted in a net loss of $427,000 in operational costs for the year.
It is believed to be the first time the not-for-profit health care authority has lost money since it began admitting patients in 1971 and the first time it has faced such major cutbacks.
Although the system had assets totaling $294 million, an increase of $7 million over the previous year, the surprising loss has forced deep spending cuts.
Larry Chewning, president and chief executive officer, said the hospital is experiencing “profitless growth.” He said the system has identified several areas where expenses can be cut that could result in a $10 million savings. One way is to eliminate 80 to 100 positions vacated by retiring employees or other employees who lose their jobs.
Chewning said that total revenues are up, as are the number of patients and services provided by the health care system. But the increased revenue was counteracted by losses, such as spending $30 million to care for uninsured patients last year, seven or eight percent higher than 2006. Also, the cost of pharmaceuticals and other supplies have more than doubled the rate of inflation.
Nash Health Care added approximately 110 to 120 staff positions in the last four or five years, Chewning said. Adding those positions “has contributed pretty heavily” to the increase in spending, he said.
One large expense is using what are known as traveling nurse. Those nurses have contracts of anywhere from six to 12 weeks and they are usually paid 30 percent to 40 percent more than staff nurses.
The system spent $5 million on traveling nurses last year, Chewning said, adding that those positions will be replaced with permanent employees.
Chewning said most of the “hard decisions” on spending have already been made and plans enacted. He said the system will finalize its staffing positions within the next two months.