Published: October 30, 2008 12:00 pm      

127 people to lose jobs at Valley View Hospital

ADA — Valley View Regional Hospital today announced layoffs would take place this week.

A total of 127 employees will be laid off, according to Valley View President and Chief Executive Officer Ron Webb. The layoff represents 15.5 percent of the Valley View work force.

“This is a very tough and unpopular action we are undertaking, but, regrettably, it is a necessary action,” Webb said. “The health care environment has changed dramatically in Oklahoma and the country. Valley View must change if it is to operate successfully in that environment.”

Valley View is a not-for-profit community hospital serving Ada, Pontotoc County and the surrounding area. It is a 200-bed acute care facility that generates approximately $70 million in annual net patient revenue.

The layoff will affect employees in a number of hospital departments including laboratory, radiology, respiratory therapy, oncology, physical therapy, emergency room, pharmacy, EMS, plant operations, medical records, home health care, materials management, human resources, administration, security, housekeeping, business office, admissions and food service.

Employees affected by the layoff will receive severance payments based on years of service amounting to one week’s pay for each year of service, up to 12 years.

Webb said arrangements have been made for those losing their jobs to meet with the Department of Commerce for advice to apply for unemployment and to apply for jobs.

He said they are also working with the Chickasaw Nation in the case the tribe needs some of the staff being laid off.

“We’re really working to try to help them find jobs,” Webb said.

The decision to layoff so many people was made Tuesday night during a board meeting.

“It was a really hard decision for them,” he said. Webb said the finalization will be made today and those affected are to be notified Friday.

The layoffs became necessary, Webb said, due to an accelerating decline in reimbursements from Medicare and other third-party payers.

Additionally, he said, reimbursements made to the hospital now often occurred months following the original submission for payment, creating cash flow challenges.

Approximately 60 percent of patients who utilize Valley View services are covered by Medicare.

“Valley View faces the same challenges acute care community hospitals across the country face,” Webb said. “Our costs to deliver quality health care continue to climb at a rapid rate. At the same time, the payments we receive are declining and Medicare and other insurers are taking much longer to process payments. It is simply a tough, tough environment.”

Based on a study of American hospitals, Webb said, Valley View had a high ratio of salaries, wages and benefits (SWB) to occupied beds. The benchmark, Webb said, is about 43 percent. Valley View ratio of SWB to occupied beds currently runs about 53 percent.

“We have worked hard in the other areas of the hospital to be efficient, save money and still deliver excellent patient care,” Webb said. “With the pressure of reduced reimbursements, we simply could not avoid salary, wage and benefit costs any longer. They must be reduced if we are to survive and operate successfully in this new and challenging environment.”

Other health care and business entities in the area have been contacted, Webb said, and would be providing representatives to interview the employees for new employment.

“These employees have done an outstanding job for Valley View and the community we serve,” Webb said. “We will maintain our focus on quality health care as we reorganize and rededicate ourselves to our primary mission.”