Southeast Georgia Health System has been able to maintain financial stability;
however, a series of external economic and industry issues have created
challenges for the Health System. In an effort to mitigate these challenges,
Southeast Georgia Health System President and CEO, Gary R. Colberg, FACHE
announced a number of strategic initiatives (listed below) to the Glynn-Brunswick
Hospital Authority, Camden Advisory Board, physician leaders, and team members.
“Many hospitals in Georgia, including Southeast Georgia Health System,
currently face a genuine financial crisis that threatens their ability
to continue to serve their communities,” says Colberg. “It
is important to note, that while a good majority of health systems and
hospitals were effected in 2008 and 2009, our Health System was able to
maintain positive financial performance much longer.”
Colberg states the major causes of the current financial concerns are:
severe cuts in federal and state funding, including sequestration, soaring
increase in the number of uninsured cases, sicker patients (due in part
to rising out-of-pocket co-pays that seem to be delaying patients’
decisions for treatment), increasing costs of technology, and payment
reductions from other government and private payers.”
At the end of Colberg’s presentation to each of the groups, he stated
that “Health care providers throughout Georgia and the US are having
to make difficult cost-cutting decisions like the ones seen here. However,
what I want everyone to take away is that there are no layoffs, and health
and retirement benefits remain intact.”
Operational changes planned included, but are not limited to the following:
Action Step #1-Market Area
- Redefine Service Area from eight counties to six
- Glynn, Camden, McIntosh, Brantley, Wayne and Charlton Counties
- Limit non-emergent care at all Cooperative Healthcare Services Inc. locations
Action Step #2-Impact to Team Members
-
Salary Adjustments
- Forgo annual salary increase or market adjustments for all team members
- Reduce Management Staff pay by 2.0%
-
Increase Team Member Health Insurance Premiums
- More heavily weight family coverage
- Additional premium for tobacco users
- Increase prescription co-pay by $2.50 for generic drugs and $5.00 for all others
- Restrict travel & education spending
-
Reduce mileage reimbursement rate
- Encourage use of Health System vehicles
- Forgo the 2013 Holiday Party
Action Step #3-Operational
-
Through
attrition, eliminate 36 FTEs over the next 12 months
- Reduce contract labor
- Evaluate outsourcing of select services
- Implement additional supply cost savings initiatives
Action Step #4-Non-Clinical Services
- Reduce marketing expenditures by one third
- Reduce sponsorships and community support by 50 percent
-
Reduce valet parking services
- Service only available at Outpatient Care Center
Result of Action Steps
- Annualized Net Effect $14,186,000
- Net Effect on Balance of FY 2013/2014 = $7,284,000
Most important fact!
- Everyone remains employed
- Health and retirement benefits remain intact