THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, April 19, 1996 TAG: 9604190650
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
LENGTH: Medium: 68 lines
Children's Hospital of The King's Daughters in Norfolk will lay off 15 people and combine some departments, part of a continuing effort to cut costs, hospital executives said Thursday.
The employees to be let go, all members of support staffs, were told Thursday. Hospital leaders were planning staff ``town meetings'' to explain the decision to the 1,534 other employees.
CHKD's president said the hospital also will offer early retirement to employees 59 and older.
For more than a year, CHKD has been changing to cope with upheaval in the health-care market. This week's layoffs, for instance, came almost exactly a year after the hospital laid off 19 managers and dropped 12 vacant positions.
The latest cuts were needed, executives said, because of a big change in the government program that pays the bills of half of CHKD's patients - Medicaid. Medicaid is the government health insurance program for the poor.
This year, the state required that most Hampton Roads Medicaid clients join health maintenance organizations. HMOs try to hold down costs in part by keeping people out of the hospital.
CHKD may have felt the effects more than most because it sees more Medicaid clients than other hospitals in Hampton Roads.
In December, before the program kicked in, CHKD had about 4,000 visits to its emergency room, said President Robert I. Bonar Jr. Medicaid patients often didn't have a family doctor and used emergency rooms as if they were doctor's offices. The children often had to be admitted for illnesses that would have been less serious if treated earlier.
But in January, most local Medicaid patients got family doctors through the HMOs. That month, the number of visits to CHKD's emergency room dropped to about 2,000.
Between the Medicaid clients and other patients who get their insurance through HMOs, about three-quarters of CHKD's customers are in managed care. CHKD has responded in part by putting more emphasis on outpatient services.
The nonprofit hospital has seen its margins drop in the past few years. In 1992, it was about 5 percent. Today it's about 1.3 percent, Bonar said. He says a nonprofit organization shouldn't have a large margin, but hospital leaders would like to see the organization get back to at least 2 percent.
Besides the layoffs, the hospital has combined some underused departments with other units. Some vacant nursing positions were dropped, although the hospital couldn't provide an exact number.
For example, the department that uses electronic monitors to keep an eye on cardiac patients has been combined with the pediatric intensive care unit. The nurses will continue to do monitoring when there are cardiac patients. Other times, they will help tend to the intensive care patients. by CNB