Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 27, 1994 TAG: 9411280002
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Long
As of Thursday, the public relations department at Carilion Health System's largest hospital, Roanoke Memorial, will be gone. The three-person staff, which includes a vice president, represents more than 30 years of employment at RMH.
The RMH IV Therapy Team was eliminated Oct. 1, its duties transferred to regular staff nurses. Fifteen employees, many with years of service, were affected. Five found jobs elsewhere; the other 10 are being allowed to stay on the RMH payroll until March.
The 10th floor at Carilion's Community Hospital also has closed and its staff offered transfers to Carilion-owned Burrell Nursing Center. The transfer cost some workers as much as $7,000 in annual salary.
Every hospital operator in America is cutting costs because of pressure to charge lower fees, but this is the "caring lion," the Roanoke Valley's largest employer and the largest health system in the state.
The future of its 13 not-for-profit hospitals, in a region stretching from Farmville to Big Stone Gap, depends upon how cost-efficient it can become.
The cuts have been painful for everyone, Carilion executives and employees said.
"You're used until they're finished with you," one longtime licensed practical nurse said. "I understand this. It's just business."
She won't allow her name to be published, though, because she's worried that might lessen her chances of getting another job with Carilion when her temporary assignment ends.
"Nobody is really happy about the changes we have to deal with," Carilion Senior Vice President Lucas Snipes said. He had the job of telling the RMH public relations staff that its work, but not its workers, would be transferred to the corporate offices.
All of the changes and a general fear of the unknown in health care have made the rumor mill active. Some rumors turned out to be true - the elimination of the IV team was on the grapevine two months before the announcement was made. Other rumors are far-fetched, Carilion President Thomas Robertson said.
"No, we're not bulldozing the Rehab Center and making a parking lot," he said.
However, the Rehabilitation Center, a two-part facility that is near Roanoke Memorial and houses mental health and cancer patients, closed a floor by moving the leukemia patients from the third floor to the first floor with other oncology patients.
The move made everyone nervous, said Elaine Busch, a 14-year veteran nurse.
"It was hard for the patients and their families. They really trust us. At first, they were uncomfortable," she said. "It was especially scary for the third-floor people."
Leukemia patients require more complicated care than other cancer patients, and they worried about being cared for by unfamiliar nurses, Busch said
Nurses become an "extended family" for patients, she said. "It has been hard, and you do wonder what the future will bring."
In the past 18 months, jobs have been eliminated in almost every part of Carilion, including its corporate headquarters. When a corporate vice president left to head a for-profit division in Richmond, his position wasn't filled.
At RMH, the number of administrators was cut from 14 to seven. One administrator/vice president was laid off; the others found jobs within the Carilion system. The night administrator position was eliminated, and the remaining executives now share on-call duty.
Similar steps have been taken at Community Hospital, where 73 department directors have been trimmed to 56. The facility has one director of nursing, instead of the previous four, and seven head nurses, instead of the previous 18.
Also under study are the future of Gill Memorial Eye, Ear, Nose and Throat Hospital and of the hospital labs. Gill operates as part of Community Hospital and mainly provides outpatient eye surgery but does not have its own operating-room staff. The same nurses are on call for eye surgery at Gill, RMH and Community.
A report on the laboratory study is due next month. One option under consideration is leasing the labs to a private laboratory company, much like some department stores lease jewelry and shoe areas to other companies who specialize in those products.
No part of the Carilion system has been overlooked in the quest to cut costs. Instead of throwing away stained linens, the hospitals' laundry dyes them, and trash-can liners are changed less often in business offices.
By paying attention to the smallest savings, Community has been able to cut its nonsalary budget by $2 million a year.
The Roanoke Valley hospitals still have a greater percentage of beds being used than many hospitals, but outpatient services provide an increasingly bigger chunk of the revenue, Carilion CEO and President Tom Robertson said.
At some Carilion hospitals, outpatient services account for more than 50 percent of income; overall in the system, it provides 25 percent, Robertson said.
Bed use will continue to go down, he said.
RMH has 677 licensed beds, but its daily patient census is about 375. Because insurers are expected to become even more reluctant to approve hospital stays, RMH might need fewer than 300 beds in five years, consultants say.
At one time, a patient who had gallbladder surgery might have spent a week in the hospital; now, that same patient can be home in 48 hours or less. Patient days, once the main source of revenue for a hospital, are declining. At Roanoke Memorial, the number of patient days (occupied beds multiplied by days) in October was 17 fewer than in September.
Average stay for psychiatric care is below 10 days; it used to be 15. St. Alban's Psychiatric Hospital in Radford, which Carilion owns, has room for more than 162 patients, but average census in October was 54.
The public needs to get used to seeing some areas of hospitals "dark," Robertson said. "We'll never see bed use like before.
"Capacity is an issue. The way we're delivering health care is changing. The second issue is trying to manage in this transition. It's easy to figure where we need to be in the year 2000 and hard to figure out how to do that," he said.
The budget that went into effect Oct. 1 was based on what Robertson called a "moderate" decline in bed use, but the declines are greater than projected. The average length of stay for a patient is a day less than the average a year ago, he said.
At the same time, though, income will continue to drop, Robertson says. The drop in the past fiscal year was less than 10 percent, however, and the business is not facing a crisis, he said.
Carilion made $20 million last year. But its $275 million debt is too high, Robertson said. And it still will be too high after the company pares it by $75 million with the profit it got from the recent sale of its private Sterile Concepts division.
Selling the Richmond-based company, which packages surgical procedure trays, was part of Carilion's re-engineering. Sterile Concepts had been a cash cow for Carilion's nonprofit hospitals, but needed capital in order to grow. Carilion thought it should devote the corporation's attention to health care, Robertson said.
According to the American Hospital Association, 675 community hospitals closed between 1990 and 1993. Some estimates still put the excess number of hospital beds in America at more than 200,000.
It is estimated that every community has about 33 percent too many hospital beds. If Carilion had not converted some of its regular hospital beds to long-term care beds at facilities in Bedford, Radford and Giles, it might be faced with a huge oversupply.
To Robertson, the solution is not as simple as shutting down facilities.
"You can't put all hospitals out of business, and I think we'll be well positioned to be a survivor."
Neither Community nor Roanoke Memorial will close, Robertson said. However, both are honing their identities to create regional market niches, Community as a women's and children's hospital; RMH as a high-tech, acute-care facility.
Three years ago, Community had no residents and no faculty. It now has 27 full-time faculty on its payroll, including 18 pediatricians.
Many of the physicians are specialists, which means children who once had to leave Roanoke for special cancer treatment can receive the care here, said Dorman Fawley, Community president.
The $55 million South Pavilion that opened this year at RMH is a sore spot for employees who are facing the loss of their jobs, but it did not add to the hospital's bed capacity because it replaced the older South and North pavilions, Robertson said. Old South is scheduled to be torn down next fall. The North wing might stay in place, but its space is not needed, he said.
To try to fill some of its excess beds at both RMH and Community, Carilion is asking the state to license 20 beds at each facility for patients who need less care than normally given in hospitals but more care than they could get at a nursing home. There is more demand than supply of sub-acute beds in the area, and, while they bring in only half as much income as regular beds, they also cost a lot less to staff.
Converting beds is not a long-term answer, however. Neither is just cutting staff.
"You can't keep asking people to do more with less," Robertson said. "There is a balance you have to achieve. It's easy to say that every time you cut staff you cut care, but that's too easy."
"I don't think we've seen any compromise in patient care because we haven't made the cuts," he said.
Carilion has a layoff plan in place, in addition to the cuts already made, most of which have occurred through attrition and by not filling positions.
Since about 50 percent of the system's annual budget - half of $434.8 million in fiscal 1995 - is for salaries and employee benefits, Carilion's work force is "constantly being reviewed to be sure resources are balanced with demand," he said in a September speech for Downtown Roanoke Inc.'s annual meeting.
From July to the end of September, RMH cut staff by 113 full-time equivalents or FTEs, which is the way staff is measured since so many part-time workers are used.
RMH still needs to reduce its 2,600 FTEs by several hundred, its president, Houston Bell, said.
The relationship of full-time equivalents to patients at Carilion facilities is above the national average.
Even with cuts, Community Hospital now has 5.2 FTEs per occupied bed; the national average is 4.3.
Managed care will drive it down further, Fawley said.
by CNB