Budget woes lead to GVH layoffs and cutbacks

Crested Butte Physical Therapy to close, temporarily
 

Gunnison Valley Heath (GVH) announced changes this week to its staffing structure and valley-wide services. Twelve people have been let go and Crested Butte Physical Therapy will be shut down for an undetermined amount of time in a continued effort to bring the health system’s financials back into the black.

According to Michelle Campbell, GVH chief marketing and business development officer, at the end of April the hospital was $684,000 in the red and Senior Services were $179,000 in the positive. Cost reduction measures outlined this spring—including wage freezes, a hiring freeze and a temporary stoppage of 401a contributions—were not enough to stem financial losses. There are positive signs—the hospital lost less money in April than in previous months. But staff agreed it wasn’t enough.
“The executive team agreed that we were not going to get enough reductions in early April, and so [Scott Landrum, interim CEO] went back to department directors and asked them to find ways to reduce costs,” said Campbell. “The first round of reductions was broad-based, organization-wide, and in the second, each director looked closely at their specific department.”
Some departments changed staffing policies to send people home early if their department is not busy; others redefined supervisory roles; and some have eliminated positions. In total, 14 jobs have been redefined, restructured or eliminated, and 12 of GVH’s approximately 300 staff will be let go.
Campbell said the health system spends approximately $14 million per year on salaries and benefits; the current changes, combined with $409,000 already saved by placing a hiring freeze on eight unfilled positions, will save the health system approximately $1.1 million per year. Campbell credits earlier cost reductions with allowing GVH to keep the job eliminations as few as possible, and said GVH will do its best to help those losing their jobs.
“We’re going to be giving close support from managers and human resources for employees who will be leaving, and we’ll be giving them priority for vacancies for which they are qualified in the organization,” Campbell said.
GVH will also be temporarily closing Crested Butte Physical Therapy, in the Ore Bucket Building, on July 13. According to Campbell, the clinic sees about 140 patients per month and employs two full-time employees and one on-call staff member. GVH is looking for places to reassign those staff as other departments are restructured and Campbell says that patients will be invited to continue their therapy in Gunnison. The move will save GVH about $150,000 per year.
Once these changes are in place, GVH executive staff and board of directors plan to turn their focus toward improving internal processes. Campbell reiterated, as a public healthcare system, GVH’s ultimate goal is to create a financially sound organization that provides quality healthcare to the entire valley. The reality, however, is that ongoing changes to the national healthcare system will keep GVH and hospitals like it on their toes.
“I think that small rural health systems participating in communities like ours, that are affected by a seasonal boom and bust economy, are going to be thinking differently all the time about how we do business. That’s going to be intensified with healthcare reform and when bundled payments take effect,” Campbell said.
Toward that end, the board of directors is also looking at long-term management strategies that will help the hospital and entire health system stay nimble. One option currently under investigation is whether GVH should pursue a long-term contract with Quorum Health Resources—the hospital consultant through which the interim CEO was hired—or a similar organization. The board will meet this week and on an ongoing basis to determine the best long-term plan.