JASPER — A reduction in Medicare payments has forced Memorial Hospital and Health Care Center to make $3.6 million in cuts, some of which will be implemented as soon as October.
The hospital has an overall budget of $180.7 million.
The move, announced Monday by hospital officials, means a handful of workers will be shifted to different jobs and other positions that had been budgeted for will go unfilled.
The development comes as Medicare reduces payments to all hospitals by 2 percent as part of federal across-the-board spending cuts known as sequestration.
The reduction will cost Memorial Hospital $1 million a year, said Ray Snowden, the hospital’s president, CEO and chairman.
The cuts also were motivated by lingering questions over how much it will cost to implement the Affordable Care Act, or what’s commonly known as Obamacare.
“We’re uncertain how the Affordable Care Act will specifically affect Memorial Hospital,” Snowden said in a prepared statement. “However, we know the government and other payers will continue to reduce payments to providers in the future. We must find ways to reduce our costs while continuing to improve the quality of care provided to our patients.”
In another cost-cutting move, the hospital will shorten the hours of its observation unit, which now provides around-the-clock outpatient treatment to those who have had blood transfusions and offers diagnostic testing to determine whether a patient needs to be admitted to the hospital.
Beginning Oct. 1, the unit, which is on the hospital’s third level, will be open Monday through Saturday from 7 a.m. to 7 p.m. It will be renamed the outpatient center.
“This change allows us to focus care on our outpatients while eliminating this unit’s expense of around-the-clock services,” said Kyle Bennett, the hospital’s chief operating officer.
The hospital has 1,525 employees. Because of the cuts, about 30 positions in various departments will be left unfilled and about six workers, mostly in the observation unit, will be moved to different jobs.
Randy Russell, the hospital’s chief financial officer, said that even with the cuts, the hospital is on sound financial footing. The financial services company Standard & Poor’s has given the hospital an A- rating, which “demonstrates a strong financial position and is rare for an organization of our size to achieve,” Russell said.
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