McAlester News-Capital, McAlester, OK

May 2, 2013

McAlester hospital CEO plans to cut costs by $4 million by July

By James Beaty
Senior Editor

McALESTER — McAlester Regional Health Center CEO David Keith told the hospital board Wednesday he plans to enact a series of cost-savings measures over the next two months.

Keith spoke of his intentions during his CEO report when the McAlester Regional Health Care Authority board met in regular session at the McAlester Regional Health Center  late Wednesday afternoon.

“I will be reducing FTEs,” Keith said, referring to full-time employees. “I haven’t decided where those reductions will be.”

Keith went on to say that he knows the hospital has too much management.

Some FTEs may be reduced by attrition; some employees could be reassigned, Keith told the board.

Also, every contract will be scrutinized, looking for ways to save money, he said.

“By July 1, I will have a plan to reduce $4 million in costs,” Keith told the board, which consists of citizens volunteers and several physicians.

Earlier, MRHC Authority Finance Committee Chairman Evans McBride questioned why the hospital wasn’t showing more of a profit, based on things including census numbers — the number of patients in the hospital at a given time.

Afterwards, the New-Capital spoke with Keith about his intentions.

“We’re not in a crisis mode,” Keith said. “We’re profitable.”

However, Keith said he wanted to start taking steps to cut costs now “so we can avoid taking Draconian cuts when it’s too late to recover.”

Keith blamed part of the situation he says the hospital is facing on the high costs of hiring temporary agency nurses  to handle some staffing challenges, as well as the pending financial realities the hospital will face because of provisions in the Affordable Care Health Care Act — also known as Obamacare among some sectors of the public.

“Affordable Care is going to take $3 million a year from us,” Keith said. That’s because the government will reduce Medicare reimbursements by 2 percent, he said.

The recent sequestration federal budget cuts reduced Medicare reimbursements by another 2 percent, Keith said.

“And we didn’t get the Medicaid expansion,” Keith said, a reference to Oklahoma Gov. Mary Fallin’s rejection of the federal funds offered to states that accepted the Medicaid expansion plan in the Affordable Care Act.

Keith said he expected to have some of his decisions made over the next two-to-three weeks regarding the cost-cutting measures .

Contact James Beaty at jbeaty@mcalesternews.com.

 

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