MedStar Washington Hospital Center to cut jobs, citing financial pressures

November 11, 2013

MedStar Washington Hospital Center, the region’s largest private hospital, is cutting jobs because of mounting financial pressures, a hospital spokeswoman said Monday.

A first round of management positions was eliminated Thursday, and non-management employees whose jobs are being cut will be informed Tuesday, said Donna Arbogast, vice president of public affairs. None of the positions to be cut involve bedside nurses, she said.

She declined to provide specifics, but an internal memo last week from John Sullivan, the hospital’s president, to the medical and dental staff said the hospital remains “about 120 positions over budget” this year.

Sullivan also sent a letter to the facility’s 6,000 employees over the weekend laying out its financial pressures. The hospital was $8.5 million below its budget at the end of September, the third month of fiscal year 2014, according to the letter, a copy of which was obtained by The Washington Post.

In September, the 926-bed hospital had a 4 percent decrease in admissions and an 8 percent decrease in inpatient surgeries. “This happened so suddenly that we have not been able to decrease our expenses to match this drop in volumes,” Sullivan wrote.

The hospital’s annual net revenue is about $1.1 billion, 60 percent of which goes to personnel expenses.

Like other hospitals in the region and across the country, MedStar Washington has been hurt by cuts in reimbursement from Medicare and Medicaid, as well as by the bankruptcy of D.C. Chartered Health Plan, which stopped paying for care that the hospital provided to its members. The once-prominent Medicaid contractor unraveled over the past year amid financial stress and allegations of its owner’s involvement in political corruption.

The letter said the hospital had a cut of $44 million last year, a combination of reductions in reimbursement for Medicare, dollars lost because of the Chartered bankruptcy, a District bed tax, the across-the-board federal budget cuts known as sequestration and reduced federal subsidies to safety-net hospitals under the health-care law.

In his letter to employees, Sullivan said the hospital had been trying to reduce expenses in supplies, purchased services, contracts and marketing. Since April of this year, MedStar Washington also has had a freeze on hiring, except for vacancies involving bedside care.

In April 2011, the hospital laid off about 200 workers across all departments, none of them involved in bedside care.

Lena H. Sun is a national reporter for The Washington Post, focusing on health.
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