Daily Independent (Ashland, KY)

Editorials

August 17, 2013

Tough choices

KDMC tries to limit impact if eliminating 148 good jobs

ASHLAND — Because it is the largest employer between Lexington and Charleston, any layoffs at King’s Daughters Medical Center are important to the economy of this community. Thus, when the hospital announced that more jobs would be eliminated at the medical center, people throughout this region — not just employees of the hospital — waited anxiously to learn just how bad the news would be.

To be sure, the news is not good, especially for those 148 KDMC workers who suddenly found themselves unemployed. As employees of an industry that also has experienced tough economic times, we can identify with what the medical center is going through. It is never easy when good, dedicated workers lose their jobs simply because their employers have to make spending cuts to balance theirs books.

That being said, the news from King’s Daughters’ Medical Center Thursday could have much worse. In fact, the proverbial rumor mill — which is often (usually) inaccurate — was predicting many more job  cuts.

And to its credit, the executives at King’s Daughters seem to have made the cuts in  the areas that are the least likely to have a negative impact on the quality of care of the medical center. In fact, staffing levels for direct patient care are unchanged. Additionally, some of those affected by this restructuring will be offered new positions through the job bidding process. Thus, while they may be jobless today, there is a chance they will be first in line when other jobs become open.

And while 148 jobs have been eliminated, KDMC still has 3,831 employees. That’s a lot of jobs offering good pay with benefits. That makes KDMC just the type of employer that all communities most want and need.

KDMC also is wise to make cuts by restructuring its outpatient operations located away from the main KDMC campus. The Russell Family Care Center will close Sept. 1 as will   the Pikeville Family Care Center. OPhysicians at the closed centr will be move to toehr nearby centers.

The outpatient centers provide a valuable service. Among other things, they enable patients without a regular doctor to quickly see a physician and  in so doing, reduce the number of people who go to emergency rooms for non-emergency care simply because they have no family doctor. However, other hospitals also have clinics in the same communities as KDMC which strikes us as something of a duplication of services that generates unnecessary and inefficient competition between hospitals. A little less of that we see as a positive.

KDMC is hardly alone in being forced to make cuts. Nationally, the health care industry experienced its worst summer since 2009, and the issues affecting KDMC are the same affecting the entire industry. After 114 years of serving our community, Ashland’s hospital has been caught in a perfect storm of a shifting business model, changing federal and state reimbursements, increasing demand for charity care, and a weak economy, KDMC said its release announcing the latest cuts.

"This was a very difficult decision to make," said President/CEO Fred Jackson in a KDMC release. "Together, we have done everything possible to avoid this situation, including cutting operating expenses, combining areas where that made sense, and improving our operations through process innovation. Those efforts have helped us greatly.”

While no employers like to tell a good worker that his or her job is being eliminated, it is a fact that the number one expense of most employers is payroll. That sometimes makes eliminating jobs the only way for some employers to balance their budgets.

While KDMC is operated as a “non-profit” corporation, it still must generate enough revenue to meet its expenses plus having enough money in reserve to cover unexpected expenses. Legally, the medical center cannot make a profit. Traditionally, KDMC has used much of the money left over all bills are paid to support community projects and programs that help make this a better place in which to live.

With the impact of Obamacare on health care still largely unknown, these are uncertain times for medical providers throughout the country. Our hope is that Thursday’s layoffs are the last ones that KDMC is forced to make. Regardless of what you may personally think about King’s Daughters Medical Center, it is the main engine that drives this community’s economy.

That being said, the news from King’s Daughters’ Medical Center Thursday could have much worse. In fact, the proverbial rumor mill — which is often (usually) inaccurate — was predicting many more job  cuts.

And to its credit, the executives at King’s Daughters seem to have made the cuts in  the areas that are the least likely to have a negative impact on the quality of care of the medical center. In fact, staffing levels for direct patient care are unchanged. Additionally, some of those affected by this restructuring will be offered new positions through the job bidding process. Thus, while they may be jobless today, there is a chance they will be first in line when other jobs become open.

And while 148 jobs have been eliminated, KDMC still has 3,831 employees. That’s a lot of jobs offering good pay with benefits. That makes KDMC just the type of employer that all communities most want and need.

KDMC also is wise to make cuts by restructuring its outpatient operations located away from the main KDMC campus. The Russell Family Care Center will close Sept. 1 as will   the Pikeville Family Care Center. OPhysicians at the closed centr will be move to toehr nearby centers.

The outpatient centers provide a valuable service. Among other things, they enable patients without a regular doctor to quickly see a physician and  in so doing, reduce the number of people who go to emergency rooms for non-emergency care simply because they have no family doctor. However, other hospitals also have clinics in the same communities as KDMC which strikes us as something of a duplication of services that generates unnecessary and inefficient competition between hospitals. A little less of that we see as a positive.

KDMC is hardly alone in being forced to make cuts. Nationally, the health care industry experienced its worst summer since 2009, and the issues affecting KDMC are the same affecting the entire industry. After 114 years of serving our community, Ashland’s hospital has been caught in a perfect storm of a shifting business model, changing federal and state reimbursements, increasing demand for charity care, and a weak economy, KDMC said its release announcing the latest cuts.

"This was a very difficult decision to make," said President/CEO Fred Jackson in a KDMC release. "Together, we have done everything possible to avoid this situation, including cutting operating expenses, combining areas where that made sense, and improving our operations through process innovation. Those efforts have helped us greatly.”

While no employers like to tell a good worker that his or her job is being eliminated, it is a fact that the number one expense of most employers is payroll. That sometimes makes eliminating jobs the only way for some employers to balance their budgets.

While KDMC is operated as a “non-profit” corporation, it still must generate enough revenue to meet its expenses plus having enough money in reserve to cover unexpected expenses. Legally, the medical center cannot make a profit. Traditionally, KDMC has used much of the money left over all bills are paid to support community projects and programs that help make this a better place in which to live.

With the impact of Obamacare on health care still largely unknown, these are uncertain times for medical providers throughout the country. Our hope is that Thursday’s layoffs are the last ones that KDMC is forced to make. Regardless of what you may personally think about King’s Daughters Medical Center, it is the main engine that drives this community’s economy.

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