The Oberlin Review
<< Front page News October 1, 2004

Hospital axes staff

Allen Medical Center: New problems arose after the center merged with CHP last year.
 

Allen Medical Center will lay off two employees and institute pay cuts for three others, according in an internal letter last week. Allen Medical Center Director Edwin Oley blamed the cuts on the center’s failure to meet predetermined profit margins.

“While the hospital continues to [make money], to date we are approximately $200,000 behind our year-to-date budgeted forecast,” Oley wrote in a letter, which was obtained by the Oberlin News-Tribune.

The hospital has not announced which positions will be cut, said Jennifer Kennedy, a spokesperson for Community Health Partners, the healthcare system that runs Allen Medical. She said the layoffs will not include nursing staff. The hospital currently employs 265 workers.

CHP took over management of the hospital in 2001 when Allen Medical was on the verge of bankruptcy. The hospital has operated for about 100 years and was directly owned by the College until its sale to the city in the 1970s.

The financial state of the hospital has improved recently, bolstered by a $2 million reacquisition agreement with the College at the time of the CHP takeover.

“During the three years that Allen has been managed by CHP it has been on the whole very successful,” Kennedy said. “We’ve had very successful patient volumes and have received national recognition for the improvements.”

Last year, the hospital received the Press Ganey Compass award for most improvement in services during the preceding year.

Allen Medical formally merged with CHP last year amid controversy over the nature and intent of the takeover. At a city council meeting last December, some community members openly questioned why Allen Medical was not investigating alternatives to a CHP buyout. Doubts was also cast on the financial viability of CHP’s network.

City council records show that CHP, based in the city of Lorain, suffered a $3.8 million revenue shortfall in 2003 and was forced to cut 41 positions systemwide.

Several attendees at the December meeting asserted that the hospital had simply accepted the merger offer from CHP without investigating alternatives.

“Is there anyone who denies that Cleveland Clinic and University hospitals are better institutions?” retired Oberlin professor Sam Goldberg asked at the time.

Oberlin College still owns the land and building of the hospital, but since the merger was signed, the College has divorced itself from operations and is no longer represented on the hospital board.

If CHP decided to cut care, “there isn’t a whole lot we could do about it,” former Vice President of Finance Andrew Evans said at the time.

However, President Nancy Dye said that she is very happy so far with the job CHP is doing managing the facility.

“In the healthcare business it’s very important to keep a tight reign on expenditures,” she said. “I agree with Mr. Oley’s assessment.”

Oley could not be reached for comment but Kennedy suggested that the cuts were not motivated by lack of hospital usage.

“We’re seeing a lot less in government reimbursement dollars,” she said. “We need to prepare our organization for these effects.”

The staff cuts are designed to save the hospital $36,000 per year according to the News-Tribune’s reporting of Oley’s letter.

In spite of its budget difficulties, Allen Medical is currently in the process of planning and designing a new surgery center, incorporating three new operating rooms and 12 to 16 beds for patient preparation, according to CHP’s corporate website.

While the hospital’s service has greatly improved by all accounts since it was nearly shut down in 2000, it is unclear what effect the current budget difficulties will have on hospital operation.

According to Kennedy no future cuts in personnel have been discussed and the effect on patient care will be negligible.

“Absolutely not,” she said. “There will be no change in the level of care.”
 
 

   

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