Little Rock-based Baptist Health System says it will lay off 170 workers across its statewide health care network and one industry leader says more hospitals could follow suit.
Baptist Health has hospitals, clinics and medical facilities throughout Arkansas. The health care organization is one of the state’s largest private employers with more than 7,300 workers.
In a statement provided to members of the media, Mark Lowman, Vice President, Strategic Development at Baptist Health said:
To ensure Baptist Health’s continued success and our long term ability to sustain our Mission, we are undertaking a number of initiatives that will position our organization to address the challenges of health reform and severe federal budget cuts.
Baptist Health has worked to reduce non salary expenses, gain efficiencies in all aspects of operations through consolidation of services and simplification of processes, and will eliminate approximately 170 positions or less than 2.5% of our workforce across our organization.
These restructuring initiatives will not impact the quality of clinical patient care that Baptist Health achieves on a daily basis and they are consistent with actions other hospitals have taken.
In a difficult and challenging environment of substantially less government reimbursement, burdensome government regulations, rapidly rising costs of supplies, increasing charity care and bad debt, and the need for technology and medical innovations, we believe these efforts will serve to make Baptist Health more effective.
As the states leading, Arkansas-owned, not-for-profit, faith-based health care organization, we are committed to remaining the leader when it comes to providing comprehensive services and being a safety net that provides health care services for all Arkansans.
Lowman said he could not comment beyond his statement to the media.
Bo Ryall, President and CEO of the Arkansas Hospital Association, said the Baptist Health layoffs are part of a national trend in recent months due to cuts made by the Affordable Care Act and this year’s federal sequestration.
The Affordable Care Act reduced national Medicare funding by $155 billion over a 10-year period that starts this year, Ryall said.
He added that the fiscal impact on Arkansas was roughly $2 billion. Compounded by the federal sequestration cuts made earlier this year, which lopped another two percent across-the-board cut to Medicare, Arkansas hospitals are feeling the pinch.
“This is a result of reimbursement reduction,” Ryall tells Talk Business. “You’re talking about a lot of cuts that hospitals cannot absorb. They have to make adjustments to keep their doors open.”