King City, CA, JULY 19, 2019 — In an effort to reduce financial vulnerabilities and keep essential services in the community, Mee Memorial healthcare system has implemented a reduction in force affecting 43 out of its total 353 current employees. The decision was made after months of review and implementation of other cost savings measures, including eliminating or revising many operating contracts for services provided.
“This is a painful event, first and foremost for the affected employees, but also for all of us at Mee,” said Michael Hutchinson, Mee Memorial’s CEO. “These are good people who will be missed. Unfortunately, we are forced to make this hard choice in order to adapt to changing needs in healthcare, so we can continue to adjust structure and services to meet the health care needs of the South County community.”
Mee Memorial is attempting to better align staffing and operations with its pending designation as a Critical Access Hospital, a program started in 1997 in response to a string of rural hospital closures. Critical Access designation is designed to reduce financial vulnerability of rural hospitals and improve access to healthcare by keeping essential services in rural communities, in part through cost-based reimbursements by Medicare.
In addition to reducing staff, Mee Memorial has also attempted to streamline its operations by reducing the types of services provided, including discontinuing staffing for the intensive care unit and eliminating orthopedic services.
“Small rural hospitals like ours are facing difficult challenges, including decreases in Medicare, Medi-Cal and other payor reimbursements, unreliable government funding, and legislative delays, sometimes resulting in reimbursement delays for services years after they are provided. We have no choice but to react to lower volumes and lower reimbursement rates, and to address the impacts of the transition to electronic medical records,” said Hutchinson. “We are currently overstaffed and need to reduce our employee numbers in order to come in line with other small rural hospitals, and to ensure we are offering efficient and sustainable care to our patients and community.”
These and other steps will ensure the organization operates efficiently. Like other U.S. healthcare systems, Mee Memorial faces a collection of financial challenges, including:
Reductions in reimbursement by private and public insurers
Proposed cuts to Medicare and Medi-Cal
Rising costs, including for advancing medical and operational technologies
Increasing competition and declining patient admissions.
“In light of the difficulties facing systems like ours, changes are necessary in order to ensure we are operating at our most efficient going forward”, said Hutchinson. “As hard as it is to make a change like this, it is what is in the best interest of the organization to ensure the future of Mee Memorial as a vital service to the community,” said Hutchinson.
The affected employees were given 30 days’ notice, with a final day of employment on August 18, 2019. Administration intends to reach out to local health care providers and other employers to facilitate communications regarding available positions.
The nonprofit Mee Memorial Healthcare System operates Mee Memorial Hospital in King City, plus three clinics in King City and one in Greenfield.
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