Phoebe cuts 33 leadership positions over health care changes

Phoebe Putney has released a statement on the cutting of 33 leadership positions across the Phoebe system.

/ File

Phoebe Putney has released the following statement on the cutting of 33 leadership positions across the Phoebe system:

Joel Wernick, Phoebe President and CEO, today announced that Phoebe has completed a management-level reorganization which began in August. This initiative eliminated 33 leadership positions across all locations of the Phoebe system, impacting senior vice president to team leader positions.

In a letter to employees, Wernick expressed the difficulty of taking the step to reduce the workforce to meet a changing healthcare environment that is experiencing profound changes in reimbursements. He cited hospitals nationwide adjusting to loss of volume, reimbursement reductions, new regulations and reform uncertainties.

"Every day I read about hospitals in similar situations, such as Emory Healthcare in Atlanta, forced last month to lay off 100 people as a result of changes in healthcare, and Vanderbilt Medical Center in Nashville, expected to cut more than 1,000 positions by the end of the year," said Wernick. "For the past several years we have aggressively attacked non-personnel costs, such as managing our supplies and processes. We approached labor cost controls through attrition, or not filling vacant positions as appropriate, but the economic outlook we face today demands a deeper restructuring and we have no choice but to meet this challenge head on."

Notification continued today to those affected by the change. "While our leadership model has been streamlined, we do have vacant positions within the health system, and employees who are impacted are being given priority consideration for these positions." said Dave Baranski, senior vice president, Human Resources, Phoebe Putney Health System. "We will work diligently with those employees to help them find other positions within the organization and all eligible employees are being offered severance packages."

Kerry Loudermilk, Phoebe chief financial officer, said other changes in regulations and reimbursement have impacted operations, including sequestration, which is expected to cost Phoebe $5 million in this fiscal year.

"In addition to healthcare reform and its uncertainties, Georgia has elected not to expand Medicaid coverage under the Affordable Care Act, and millions of mostly federal dollars will not be available for the treatment of Georgians," he said. "This has dramatic impact in our area of the state, which has a high number of indigent and uninsured citizens."

Phoebe leadership has adopted a three-tiered approach to expense reduction: non-labor expenses, labor productivity, and process improvement and re-engineering. Phoebe has also engaged employees, seeking additional cost reduction and process change ideas.

"For us to continue to serve the healthcare needs of our community, we must become more efficient. We have seen a monumental increase in the number of people applying for Medicaid and financial assistance. As recently as last week, a Health and Human Services official reminded local leaders that Dougherty County alone has more than 26,000 uninsured residents," said Wernick.

He said Phoebe's goal is to perform in the top 10 percent of all hospitals in quality, outcomes and patient satisfaction. "Phoebe has a more than 100 year history of caring for the people of our community," he said. "While there is a lot of uncertainty in today's healthcare environment, one thing is certain: Phoebe is dedicated to serving and will innovate and evolve to ensure we continue to fulfill our commitment to the healthcare needs of Southwest Georgia for the next 100 years."