CCMH Announces Financial Plan
Charles Cole Memorial Hospital announced a financial turnaround plan today in reaction to a continued decline in the economy and to ensure its long term viability.
Like many hospitals across the nation, Charles Cole has experienced larger than expected financial losses. Rising unemployment rates and a stagnant economy have resulted in patients going without insurance or relying on government-sponsored insurance such as Medicare and Medicaid, rather than employer-provided insurance, all of which impacts reimbursements.
“For us, this pattern started over eight years ago. We have made ongoing adjustments to our budgets each year and have worked diligently with our lawmakers to help provide appropriate funding to economically depressed areas such as Potter County,” said Ed Pitchford, president and chief executive officer. “For example, in 2007, Charles Cole enrolled with Medicare as a critical access hospital which improved reimbursements by approximately $2 million per year. We have also been fortunate to have the support of our regional state legislators to include supplemental Medicaid payments for critical access hospitals throughout the state.”
To date, after six months into the current fiscal year, Charles Cole has experienced a $1.3 million operating deficit, when it was anticipated that the hospital would break even from operations. The state recently announced a $161 million budget cut which is expected to impact CCMH’s budget by an additional $500,000 between January and June, Pitchford said.
“Because of the cumulative effect of several years of deficits, our current financial results and the looming state budget cuts, we must react to protect the ongoing financial viability of the hospital. This has caused us to make some difficult decisions to best serve our patients and communities,” Pitchford said. He explained that various options have been explored to cut costs while causing the least disruption to services and staff.
The hospital has outlined a plan that will result in cost savings and, at the same time, preserve as many jobs as possible. In order to minimize layoffs, salaried and hourly employees will see a reduction in wages. In addition, the hospital will examine positions closely; staff reductions will occur due to position eliminations, attrition, retirements and job reassignments. The hospital will also move forward with certain program expansions and growth, vendor negotiations and the reduction of agency staff.
“We are attempting to achieve the necessary expense reductions in a way which minimizes the impact on employees and the local economy to the greatest extent possible. It is our hope and aim that the result of these changes will position the organization to achieve the financial results that it needs to continue to benefit our workforce, our patients and the communities we serve,” Pitchford said.
“These are difficult decisions that we believe were made with great care and empathy for all involved. We appreciate the impact they will have both professionally and personally upon our dedicated staff,” he said.
“We are committed to our vision that we will continue to be an excellent health system and employer through the continued pursuit of excellence,” Pitchford said. “There are great things happening here each and every day and we are working on projects that will keep us at the forefront as a modern, relevant rural health system. But we earn the trust and loyalty of our patients with each and every encounter. So, while none of this news and these actions are pleasant for any of us, we must move forward with enthusiasm and dedication to preserve this organization as we know it today for the continued benefit of ourselves and our community.”
Like many hospitals across the nation, Charles Cole has experienced larger than expected financial losses. Rising unemployment rates and a stagnant economy have resulted in patients going without insurance or relying on government-sponsored insurance such as Medicare and Medicaid, rather than employer-provided insurance, all of which impacts reimbursements.
“For us, this pattern started over eight years ago. We have made ongoing adjustments to our budgets each year and have worked diligently with our lawmakers to help provide appropriate funding to economically depressed areas such as Potter County,” said Ed Pitchford, president and chief executive officer. “For example, in 2007, Charles Cole enrolled with Medicare as a critical access hospital which improved reimbursements by approximately $2 million per year. We have also been fortunate to have the support of our regional state legislators to include supplemental Medicaid payments for critical access hospitals throughout the state.”
To date, after six months into the current fiscal year, Charles Cole has experienced a $1.3 million operating deficit, when it was anticipated that the hospital would break even from operations. The state recently announced a $161 million budget cut which is expected to impact CCMH’s budget by an additional $500,000 between January and June, Pitchford said.
“Because of the cumulative effect of several years of deficits, our current financial results and the looming state budget cuts, we must react to protect the ongoing financial viability of the hospital. This has caused us to make some difficult decisions to best serve our patients and communities,” Pitchford said. He explained that various options have been explored to cut costs while causing the least disruption to services and staff.
The hospital has outlined a plan that will result in cost savings and, at the same time, preserve as many jobs as possible. In order to minimize layoffs, salaried and hourly employees will see a reduction in wages. In addition, the hospital will examine positions closely; staff reductions will occur due to position eliminations, attrition, retirements and job reassignments. The hospital will also move forward with certain program expansions and growth, vendor negotiations and the reduction of agency staff.
“We are attempting to achieve the necessary expense reductions in a way which minimizes the impact on employees and the local economy to the greatest extent possible. It is our hope and aim that the result of these changes will position the organization to achieve the financial results that it needs to continue to benefit our workforce, our patients and the communities we serve,” Pitchford said.
“These are difficult decisions that we believe were made with great care and empathy for all involved. We appreciate the impact they will have both professionally and personally upon our dedicated staff,” he said.
“We are committed to our vision that we will continue to be an excellent health system and employer through the continued pursuit of excellence,” Pitchford said. “There are great things happening here each and every day and we are working on projects that will keep us at the forefront as a modern, relevant rural health system. But we earn the trust and loyalty of our patients with each and every encounter. So, while none of this news and these actions are pleasant for any of us, we must move forward with enthusiasm and dedication to preserve this organization as we know it today for the continued benefit of ourselves and our community.”
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