Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, October 19, 1995 TAG: 9510190055
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Long
Wednesday, the Roanoke company announced a similar plan for its executives.
Carilion, which owns eight hospitals, including two in the Roanoke Valley, announced it will eliminate five of its top 10 corporate positions, replace hospital presidents with lower-paid directors and do away with assistant administrator-vice president positions altogether.
Among those whose job is disappearing is Lucas Snipes, a senior vice president who often serves as a corporate spokesman. Snipes has had eight different positions in the more than 20 years he has been with the hospital system. He said he will apply for one of the 43 new senior management jobs that will be posted today.
Shirley Holland, a vice president for marketing who also is a spokeswoman for the company, also will have to reapply for the now-redesigned top marketing job.
The changes will be completed by Jan. 1 and are just another step in a plan to cut the company's operating costs by $75 million in the next five years or so.
The executive revamping will save the company about $5 million a year, said Carilion CEO and President Tom Robertson.
Plans are to scrunch 50 management positions into 40, doing away with 10 management jobs immediately - two of which are already vacant - and then eliminate another 125 positions within 12 to 24 months, Robertson said.
The changes collapse the eight layers of management between him and an entry-level worker into five, Robertson said. More layers should disappear later, he said. The current cuts represent only 20 percent of Carilion's management jobs.
Carilion has about 7,700 employees, 600 fewer than a year ago. All but 25 of those job cuts have been accomplished through attrition, he said.
He warned, though, that cutting these top management jobs is like "picking the low-hanging fruit" and that further cuts won't be as easy. He said he can't assure that other levels of workers won't be affected at some point.
Carilion, which estimates its 1995 operating expenses will be $457.4 million, has about 70 percent of the health care business in the Roanoke Valley. But it is battling a decreasing hospital patient count and increasing competition as insurance companies direct employee groups to the lowest cost services.
"Patients are being won and lost in large numbers, and we have to be responsive to the cost demands companies have," Robertson said.
The possibility of cuts in Medicare also pressures the system, since most hospitals derive the majority of their income from the 65 and older population covered by Medicare.
The number of patients in a Carilion hospital on any day now is 125 to 140 fewer than a year ago, Robertson said.
However, outpatient business is increasing and the company just had its best financial year yet, he said.
In Carilion's new design, three senior vice presidents, each with more than 20 years of service, will lose their jobs in the corporate office. At least 10 vice president positions at Roanoke Memorial and Community hospitals also will be eliminated.
However, those affected have good chances of getting one of the new jobs if they apply, Robertson said.
What Carilion is doing is getting rid of the traditional hierarchy of business and establishing what the health care industry calls service lines, which groups workers according to duties rather than by facility.
Each service line will be headed by two directors, one of them a physician - although the physician positions likely will be part time so the doctors can continue to see patients, Robertson said.
In the new structure, Dorman Fawley, chief executive officer at Community, and Houston Bell Jr., who has the same position at Roanoke Memorial, give up those positions and become part of a five-man team of executive vice presidents reporting to Robertson.
Fawley, who came to Carilion in December 1992 from a private hospital in Atlanta, will be responsible for patient services such as oncology, orthopedic, psychiatric and women's services throughout the Carilion chain.
Bell, who has been with the hospital system 25 years, will be in charge of system services including food, health records and pharmacy, and the six hospitals that Carilion manages but does not own.
Staffs at the managed hospitals are not affected by the changes, Robertson said.
Another new member of the executive team, and the first medical member of top management, is Dr. Kellogg Hunt Jr., a Salem native who after retirement from the military in 1991 joined Roanoke Memorial as director of medical education. He will continue those duties.
The other two executive vice presidents are already in those roles. Donald Lorton, who has been with the company more than 20 years, will be in charge of strategic planning, managed care, information and marketing services. Lester Lamb, president of Radford Community Hospital, will continue to oversee Radford and Giles Memorial hospitals and plan for a new Radford hospital for which Carilion is asking the state's permission to build.
Lamb's position eventually will disappear as Radford and Giles are folded into the new system, Robertson said. Lamb is two years from retirement.
There are no plans to immediately phase Franklin Memorial and Bedford County Memorial hospitals into the new system, but Robertson said he expects executives at those hospitals and at Radford and Giles will apply for some of the new jobs so they won't miss the opportunity.
The new senior management positions will be selected the week of Nov. 20. The medical directors for the 10 patient service areas will be named in December, Robertson said.
by CNB