A Good Samaritan Health System reorganization including the elimination of 22 positions yesterday and plans not to fill an additional 28 vacation positions was necessary to bring operating expenses in line with net patient revenues, according to a news release.
“There are many factors contributing to this decision to reorganize,” said Robert J. Longo, GSHS president and CEO. “We are in a transformational period in health care. We have an obligation to protect the community’s access to health care services through the transition.”
The release said GSHS receives approximately 75 percent of its revenue through Medicare and Medicaid programs and is affected directly by cost-containment measures associated with health care reform, including mandatory spending for expensive information technology improvements necessary for electronic medical records and other purposes.
“Many patients who may have been admitted for hospital care in the past are now categorized as ‘observation status’ as they no longer meet more stringent criteria for inpatient care,” the release said. “These changes have reduced reimbursements to the hospital by millions of dollars.”
In addition, the federal budget sequestration will reduce reimbursements to GSHS by approximately $2.5 million in the next fiscal year, and GSHS incurred approximately $20 million in charitable and uncompensated care in its last fiscal year, a burden that is expected to grow in the future.
GSHS notified employees of the reorganization Wednesday and will provide severance packages and outplacement assistance to all employees affected by the changes. Leaders said the majority of jobs eliminated were in administrative and support areas, represent a less than 2 percent reduction in the labor force, and should have no impact on patient care.
“These changes are painful for everyone involved,” Longo said. “We know that we must carefully manage our resources to ensure that Good Samaritan will be able to continue fulfilling its mission to provide the services needed to improve the overall health of our community.”
GSHS is Lebanon County’s largest nongovernment employer, with more than 1,400 employees after the reorganization. The health system has also implemented a variety of other efforts to reduce expenses.