Union Hos­pi­tal lays off se­nior staff

32 po­si­tions cut to ‘right-size or­ga­ni­za­tion’

Cecil Whig - - FRONT PAGE - By JA­COB OWENS [email protected]­cil­whig.com

— Union Hos­pi­tal an­nounced Thursday that it was lay­ing off 32 em­ploy­ees, many of whom were se­nior man­age­ment-level staff, as lead­ers at­tempt to re­or­ga­nize its op­er­a­tions af­ter a failed merger bid.

Union Hos­pi­tal Pres­i­dent and CEO Dr. Richard Szumel in­formed all of the hos­pi­tal’s staff of the lay­offs via an email Thursday af­ter­noon, not­ing that they are “de­signed to have min­i­mal ef­fect on bed­side care.”

“We do not take this lightly. Even though these changes are nec­es­sary, it is ex­tremely dif­fi­cult to lose 32 val­ued mem­bers of our team,” Szumel wrote. “Our em­ploy­ees are the heart and soul of Union Hos­pi­tal and al­ways will be.”

Szumel

ELKTON

told the Whig on

Thursday that the lay­offs af­fected em­ploy­ees all the way up to the in­terim chief op­er­at­ing of­fi­cer, a se­nior vice pres­i­dent po­si­tion last held by Nick Balagurchik Jr. As of Thursday af­ter­noon, Union Hos­pi­tal listed a five-mem­ber ex­ec­u­tive team, in­clud­ing Szumel, and 30 direc­tors in its staff di­rec­tory on its web­site.

“This was from the ex­ec­u­tive team on down, in­clud­ing a num­ber of direc­tors and man­agers,” he said. “We need to re­di­rect our funds to pro­vid­ing safe, high qual­ity health care.”

All of the af­fected em­ploy­ees will re­ceive sev­er­ance pack­ages and ac­cess to out­place­ment ser­vices and emo­tional sup­port pro­grams, as needed, Szumel said. They may also ap­ply for open po­si­tions in the hos­pi­tal as qual­i­fied, and Szumel noted that those ad­min­is­tra­tors with proper cre­den­tials would be con­sid­ered for med­i­cal po­si­tions.

“The changes that are tak­ing place were nec­es­sary to right-size our or­ga­ni­za­tion,” he told the Whig on Thursday af­ter­noon. “We’ve no­ticed for some time that we needed to do a bet­ter job with ex­pense man­age­ment. We’ve de­vised a re­vi­tal­iza­tion plan, and un­for­tu­nately the first part of that was a work­force re­duc­tion to­day.”

Szumel said the ex­ec­u­tive team ex­am­ined each depart­ment and its po­si­tions to try to iden­tify where re­spon­si­bil­i­ties or du­ties may over­lap with oth­ers.

“Over time or­ga­ni­za­tions grow, and prun­ing po­si­tions is prob­a­bly long over­due in our or­ga­ni­za­tion,” he said, em­pha­siz­ing that po­si­tions, and not em­ploy­ees, were be­ing elim­i­nated.

On Thursday, Szumel was meet­ing with af­fected em­ploy­ees as well as lead­er­ship committees in the hos­pi­tal to ex­plain the changes and how they were de­cided upon. On Fri­day, fo­rums would be hosted for all em­ploy­ees to learn more about the staff changes.

The de­ci­sion to cut some of the up­per po­si­tions at the hos­pi­tal was sup­ported by the ex­ec­u­tive ad­min­is­tra­tive team as well as the hos­pi­tal’s board of direc­tors, Szumel said.

“The board has been push­ing for some change and we needed a lit­tle time to put to­gether a plan. It’s al­ways easy to put to­gether a knee-jerk re­sponse, but that’s not what this is,” he said, not­ing he in­formed the board of direc­tors at their Jan. 2 meet­ing of the work­force re­duc­tion de­ci­sions.

In Szumel’s writ­ten mes­sage to staff, he said “ad­di­tional re­struc­tur­ing of our clin­i­cal ser­vices and work­force will be nec­es­sary to po­si­tion Union Hos­pi­tal for the fu­ture.” He told the Whig that he wanted to avoid any fu­ture lay­offs.

“If I never have to do this again, I would be very happy,” he said. “On the pos­i­tive side of this is that we have the op­por­tu­nity and need to build the Union Hos­pi­tal that

will serve the county for the long term.”

“All health care sys­tems have to adapt to the new en­vi­ron­ment and small com­mu­nity hos­pi­tals are some­times slower to change, but we have the op­por­tu­nity now, with the work­force re­duc­tion and tak­ing a look at our ser­vices that we pro­vide, to make sure that we can meet our mis­sion.”

While there may not be more lay­offs on the hori­zon, the hos­pi­tal is work­ing through an­other change to oc­cur this sum­mer.

While Union has writ­ten con­tracts with Univer­sity of Mary­land Med­i­cal Sys­tem to con­tinue to staff the hos­pi­tal’s ra­di­a­tion and on­col­ogy cen­ter through June 2020, they have ver­bally agreed to ter­mi­nate the agree­ment this June, Szumel re­ported. Since then, Union has been ac­tively ne­go­ti­at­ing with other health care sys­tems to en­sure there is not a lapse in ser­vices at the highly-sought-af­ter cen­ter.

“I fully ex­pect that we will have an on­col­ogy pro­gram op­er­at­ing in the county come June 30,” he said.

The news of Thursday’s lay­offs comes less than a month af­ter Union Hos­pi­tal and LifeBridge Health an­nounced that they were ending their at­tempt

at a merger af­ter about a year.

The merger was scut­tled when the Mary­land Health Ser­vices Cost Re­view Com­mis­sion (HSCRC) be­gan a re­view of Union Hos­pi­tal’s to­tal cost of care, which has led to un­cer­tainty about fu­ture rev­enue.

For decades, Mary­land op­er­ated the na­tion’s only all-payer hos­pi­tal rate reg­u­la­tion sys­tem, over­seen by the HSCRC, which is al­lowed un­der a decades-old Medi­care waiver from the fed­eral sys­tem. Un­der the state’s waiver, all third-party pay­ers — Medi­care, Med­i­caid or pri­vate in­sur­ance — pay the same rate.

A new 10-year state Medi­care waiver passed in 2014, split into five-year blocks, has been up­dat­ing the state’s reg­u­la­tion and re­im­burse­ment sys­tem with the Global Bud­get Rev­enue (GBR) model.

Ac­cord­ing to the HSCRC, the GBR model is a rev­enue con­straint and qual­ity im­prove­ment sys­tem that aims to pro­vide hos­pi­tals with strong fi­nan­cial in­cen­tives to man­age their re­sources ef­fi­ciently and ef­fec­tively, in or­der to slow the rate of in­crease in health care costs and im­prove health care de­liv­ery pro­cesses and out­comes.

While the model no­tably seeks to dis­suade hos­pi­tals from run­ning up ser­vices for fees by plac­ing an an­nual cap on rev­enues, in Union Hos­pi­tal’s case it is hav­ing a dif­fer­ent ef­fect. As a low-vol­ume, high-cost provider, HSCRC reg­u­la­tors are re­view­ing whether to re­duce the hos­pi­tal’s re­im­burse­ment rate.

Since then, Union lead­ers have been ac­tively ne­go­ti­at­ing the hos­pi­tal’s rates with reg­u­la­tors and have be­gun work­ing on ways to in­crease pa­tient vol­ume, in­clud­ing re­cruit­ing more sur­geons and physi­cians, and work­ing to shore up com­mu­nity re­fer­rals from pri­vate prac­tices, Szumel said.

“As our vol­ume goes down, and be­cause rev­enue and costs are fixed, the price per case goes up and that’s what the HSCRC is look­ing at,” Szumel ex­plained last month.

On Thursday, Szumel told the Whig that the work­force re­duc­tion was one way to help ad­dress the hos­pi­tal’s to­tal cost of care, but it wasn’t the most im­por­tant fac­tor.

“Ex­pense re­duc­tion is im­por­tant, but what is most im­por­tant is vol­ume growth in the hos­pi­tal, and we’re work­ing with our com­mu­nity to ad­dress that,” he said.

CE­CIL WHIG FILE PHOTO

Union Hos­pi­tal elim­i­nated more than two dozen se­nior staff po­si­tions on Thursday, which lead­ers said was nec­es­sary to “right-size the or­ga­ni­za­tion.”

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