Hospital trims employee costs

MASSENA — Massena Memorial Hospital has reduced some employee hours and opted not to fill several vacant positions in an effort to control costs.

But with nearly $300,000 in estimated Medicaid cuts already proposed for the coming year and the possibility of further health care cuts if the tax on sugared beverages is eliminated from the draft state budget, MMH officials say those reductions could be just the beginning.

By choosing not to fill positions when employees have left, temporarily suspending some job searches, cutting some positions from full time to part time and reducing work hours or overtime hours for other employees, the hospital has been able to reduce staff costs without having to resort to layoffs, Chief Financial Officer Kelley M. Tiernan said.

Although there are more than 400 people employed by the hospital, the reductions that have been made have trimmed full-time equivalent employees by 11.7, from 365.6 in January 2009 to 353.9 last month.

"That doesn't mean we've eliminated 13 people," Mrs. Tiernan said. "We have not looked at our budget and said, 'We need to find people to eliminate.' There are a number of things we have been able to do; things we would have pursued regardless of where the budget was."

Mrs. Tiernan said those changes have helped control hospital expenses and should help bring the hospital back into the black for the coming months.

But other strains on the facility's revenues could prove troublesome, officials said.

Hospital Chief Executive Officer Charles Fahd warned the hospital board of managers Monday that proposed cuts to Medicaid have ballooned at an alarming rate. Cuts that were projected to mean a $66,000 loss in annual reimbursements according to a plan released in late January totaled $296,000 in lost revenues under a revised plan released last week.

Mr. Fahd attributed the dramatic increase to backlash from downstate hospitals after the original projections were described as sparing upstate facilities.

Losses in state reimbursements could continue to climb if the proposed tax on soft drinks is eliminated, according to the CEO.

"The revenues from the proposed soda tax are directly linked to the health care budget," he said. "If defeated, that money will be removed from the budget and we may see our reimbursement decline further."

The hospital has been struggling with smaller revenues and a steady rise in the amount of unpaid hospital bills written off each month. In 2009, MMH missed its $2 million budgeted profits by 80 percent, posting a gain from operations of $500,000.

January was an even more dismal tale, with the hospital posting a net loss from operations of $76,000 for the month.

The board also voted Monday to write off more than $393,000 in unpaid bills. Write-offs used to average between $150,000 and $200,000 each month, but have steadily risen over the past few years, Mr. Fahd said.

Mrs. Tiernan said January losses were due primarily to an across-the-board drop in outpatient registrations that month.

"Historically, January has been busy for us," Mrs. Tiernan said. "Fortunately, February is shaping up to be a strong month. Volumes seem to have picked up."

Mr. Fahd said felt the primary reason for lower registrations and larger bad debts was the struggling regional economy.