In response to a continuously changing national healthcare environment, Jennie Stuart Medical Center is taking important steps to better align its services and cost structure. This release will explain what actions we are taking at this time.
JSMC, like many hospitals nationwide, is facing significant regulatory and reimbursement challenges. We are adjusting to federal sequester cuts, declining Medicare reimbursement, an increasingly complex and restrictive Medicaid system, and a commercial insurance marketplace that is placing more of the burden of cost on its insureds.
Despite JSMC's historically strong operating performance, it is clear that we are not immune to the economic headwinds within the healthcare environment. Both payers and consumers have reined in spending, which affects the volumes and business models upon which all community hospitals are built. However, our organizational fundamentals are strong, and reflect the hard work of our employees. Our financial position is solid. We continue to make long-term investments in the growth of our quality Medical community and networks. Our response to this environment will combine a commitment to long term investments in our core service lines with prompt action to reduce our costs.
Despite fairly strong outpatient service volumes, JSMC finished the second quarter of 2014 with an operating loss. Noting a downward trend in revenue, we attempted to mitigate these losses by flexing staff and controlling key operating costs. By the end of the second quarter, we had begun to appreciably impact our operating expenses, but more must be done.
The current environment requires that we continue to increase our efficiency. To do so, we are taking a series of aggressive steps - from managing monthly operating expenses, tightening travel & marketing budgets, reducing supply costs and renegotiating contracts with vendors. As part of the process of adjustments, we will eliminate 70 job positions organization-wide. This will occur through a combination of employees participating in an accelerated retirement program and layoffs.
Each of these steps will be difficult. Our healthcare system is built on a tradition of growth and continuous investment in people and technology. However, today's changing operating climate demands that we respond to ensure our future viability for the communities we serve. The decision to eliminate even a single employee's job is a difficult one. Our people represent both our history and our successes.We believe these job eliminations, in conjunction with other focused cost reductions, will provide the ability for JSMC to adjust its cost structure, and become a more efficient, quality driven, competitive healthcare provider for the patients in our regional marketplace moving forward.
Information provided by Linda L. Browder
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