Decatur Morgan Hospital has cut eight employees and reassigned 37 others within the Huntsville Hospital System to trim costs, said Nat Richardson, president of the Decatur hospital.
Because of bad debt, uncompensated and charity care, Decatur Morgan Hospital had to restructure its operational model, he said, a move that started this week almost one year after the hospital lost $6.2 million.
“Revenues were not exceeding the current structure, so we had to make some changes,” Richardson said, adding that eliminating the eight positions will not affect patient care or the services Decatur Morgan provides.
Job position cuts and reassignments will save the hospital $1.3 million. Richardson said Decatur Morgan renegotiated some of its contractual services such as equipment rental and saved another $1.2 million.
Two of the job cuts were clinical positions and the others were support nurses who were not the primary care providers for patients.
Morgan County Commission Chairman Ray Long said Thursday he was not aware of the job cuts, but said it’s important for hospital officials to do what they can to ensure the county has a strong health care system.
“I know hospitals across the state are suffering because Alabama has one of the lowest reimbursement rates in the nation,” he said.
The commission appoints two of the hospital board members and shares a third appointment with the City of Decatur.
Long said schools and the hospital are always two things of interest for industrial prospects looking to locate in the area.
“It’s real important that we keep this hospital open,” he said.
Decatur Mayor Tab Bowling echoed Long’s sentiment.
“I appreciate the investments they have made, and I know that companies across America are having to make adjustments,” he said.
Richardson said 32 of the 45 employees affected by the restructuring were assigned to jobs within the Decatur Morgan system, which could have meant a transfer to the Parkway Campus or Decatur West Campus.
Another five were offered jobs within the Huntsville Hospital System, which includes hospitals in Huntsville, Madison, Athens, Decatur, Boaz, Guntersville, Moulton, Red Bay, Sheffield and Fayetteville, Tennessee. The Health System includes more than 2,200 patient beds and 15,000 employees.
Richardson didn’t release details, but said the eight remaining employees were offered severance packages.
He said a number of things — including Alabama’s failure to participate in Medicaid expansion, the state’s wage index and insurance reimbursement rates — continue to present financial challenges for hospitals statewide.
Richardson said Decatur Morgan’s bad debt and uncompensated care was $39 million a year ago.
“We’re a public hospital, so we treat people when they come in the doors, regardless of whether they have an ability to pay or not,” he said.
Medicaid expansion was part of the Affordable Care Act, but Alabama opted not to participate. Richardson said expansion would have meant an additional $6.2 million for Decatur Morgan last year.
He said U.S. Health and Human Services is currently considering a change to the wage index that could mean more money for the hospital through Medicare payments.
As it is right now, however, Alabama hospitals get about one-third the Medicare reimbursement that a hospital would receive in California.
“It’s a zero sum game,” Richardson said about Medicare reimbursement. “States with the highest wages get the highest payments. I don’t know how a kidney transplant in California is more valuable than one in Alabama.”
He said the current proposal under consideration would have meant an additional $1.4 million in Medicare payments for Decatur Morgan.
“We’re facing the same challenges as every hospital in the state,” Richardson said. “But the services we provide in Decatur are as good as services anywhere, and in some cases, better.”
Decatur Morgan, which is licensed for 273 beds, has been part of the Huntsville Hospital Health System since 2012.