Ozarks Medical Center President and CEO Thomas Keller says over the past few months OMC has been working hard to find ways to grow volume and reduce expenses to remain a strong organization to care for the people in its 11-county service area.
“We made a conscious decision in early March to work toward achieving a positive margin versus making drastic cuts,” he said. “In large part, these measures have been successful in reducing our expenses.”
Keller said over the past few weeks, there have been staffing changes in specific areas that have resulted in the elimination of 11 jobs in the organization, primarily in non-clinical areas. Several of those affected have accepted other positions in the organization. No other reductions in force are planned at this time.
“These have been extremely difficult decisions to make, however, it is imperative that OMC remains financially strong,” he said. “Although we will continue to face challenges in the months and years ahead, I remain confident that OMC will provide exceptional care to this community long into the future.”
The need to reduce expenses has been driven primarily by two things, according to Keller. First, OMC and hospitals across the country have been experiencing a decline in reimbursement, the amount the organization receives to care for patients. Second, OMC and many other hospitals have experienced a significant decline in volume of patients.
“In 2012, the average daily census at Ozarks Medical Center was 60 plus patients,” he said. “Since early summer 2013, the average daily census declined to less than 50. That’s an about an 18 percent reduction in volume. These two things have forced OMC to make some significant changes.”
The first change was a reduction in annual expenses in the summer of 2013 that resulted in a reduction of force of 32 people.
“Since then, our volume has continued to remain flat until April. However, declining reimbursement from Medicare and Medicaid along with an increase in charity care for people who can’t afford to pay has continued,” he said. “In order for OMC to remain financially viable, we have to produce a positive margin. Not a big margin, but a positive margin.”
Keller said leaders have been finding ways to reduce expenses in their individual departments and clinics. OMC was over budget regarding the number of hours worked for the expected volume of patients, he said. As a result, as employees have left the hospital over the past few months, their positions have not been replaced. Also, some employees have experienced a decrease in hours worked depending on the number of patients being care for.
“Hospitals are not factories or automated assembly lines,” he said. “Hospitals are made of people. A human hand touches everything we do. As a result, more than 50 percent of our annual expenditures are to employees in salaries and benefits. However, most of this budget alignment has been handled through attrition. Our team understood the importance of reducing expenses and has been very successful in finding new, more efficient ways to work, rather than automatically refilling an empty position.”
OMC is the area’s largest employer with a total workforce of approximately 1,200 individuals. Keller said it is critical for both the economic health of the region and for the physical health of residents for OMC to remain a strong organization for the community.
“Every hospital is facing these same challenges. We will have to continue to find ways to grow OMC as well as to reduce how much we spend to do what we do,” he added. “As we continue to face tremendous challenges in the months and years ahead, OMC is and will remain committed to continuing to provide exceptional care to our patients.”