By Bill Hendrick
Many people who in ordinary times would visit the hospitals in Sandy Springs and Buckhead for treatment are staying home because of the recession, forcing area institutions and those around the state to impose or at least consider cost-cutting measures.
At Piedmont Hospital in Buckhead, those steps include staff reductions, said Diana Lewis of Piedmont Healthcare.
“Seventy positions at Piedmont Hospital have recently been identified for reduction,” she said. “Careful consideration was given to ensure that patient care and service are not compromised.
“Every effort is being made to work with impacted employees, with a primary focus on reassigning staff to existing critical vacancies whenever possible.”
Kevin Bloye, vice president of the Georgia Hospital Association, said member hospitals every day are reporting financial problems related to the recession.
“Elective procedures, which are considered more profitable and help hospitals offset rising uninsured-indigent care costs, have dropped considerably,” Bloye said. “As a result, hospitals throughout the state are being forced to make some very difficult decisions, including laying off employees, reducing services, freezing salaries.”
He added: “It’s a very difficult time for the entire Georgia hospital community.”
Northside Hospital on Sandy Springs’ “Pill Hill,” at the intersection of Johnson Ferry and Peachtree-Dunwoody roads, “has not had to take any of these actions,” spokesman Russ Davis said. He reported a “slight decline in elective surgery,” but “overall, things are normal.”
Lynn Petersen, an official at St. Joseph’s Hospital, also on Pill Hill, said the institution is feeling the “same economic stresses” that are affecting other hospitals and businesses.
“People are putting off elective surgeries, so our census is down,” Petersen said. “We are having to be prudent in what we are doing, hiring and so on, but we’re not in any financial trouble.”
DeKalb Hospital in Decatur appears to be an exception to the economic troubles. “Volumes are up,” spokesman Mike Tu said, and no one has been laid off.
“We have actually expanded several departments and are actively recruiting to fill positions for those departments,” Tu said.
But Piedmont’s Lewis said her hospital company had to take steps to save money in part because of declining patient volumes.
“All hospital departments are focusing on eliminating open, nondirect patient care and administrative positions and reducing overtime and contract personnel hours in services with declining volume,” Lewis said. “Hiring is limited to critical vacancies.”
She said work on the Piedmont Outpatient Center at the Piedmont West Medical Office Park at the intersection of I-75 and Howell Mill Road will continue as scheduled. But construction on Piedmont’s Newnan Hospital “is on hold because the current economic environment has resulted in significant undesirable changes in interest rates and the capital liquidity of lending institutions.”
Those changes forced Piedmont Healthcare “to revisit its funding options for the new Piedmont Newnan Hospital facility,” Lewis said. “Because construction activities and expenditures for the replacement hospital are bundled in specific phases for the project, Piedmont has the advantage of being able to adjust the timing of phases and cash-flow requirements.”
The company decided “to pause the project” for at least a few months.
“The good news is that the current economic environment is causing some costs of construction and materials to fall,” Lewis said. By delaying the project, “we have strong reason to believe that we will be able to take advantage of reduced costs.”
Dr. Gregory Simone, who heads the competing WellStar Health System, based in Marietta, said hospital companies are worried about cash flow because they must, by law, provide care to indigent patients. That is more of a problem as the number of patients who are able to pay their bills declines sharply.
Simone said the financial problems of hospitals will be exacerbated if the General Assembly follows through on Gov. Sonny Perdue’s proposal for a tax on hospitals.
A tax on hospitals could hurt companies such as WellStar and Piedmont, Simone said, while helping financially strapped Grady Memorial Hospital.
“The economy is having a big impact on health care,” he said. “Hospitals are seeing more people who are uninsured. We’re seeing a major increase in no-pays. We’re doing more work and getting paid less.”
Admissions and outpatient lab testing are down across the metro area, Simone said.
“A lot of things that are elective are being put off,” Simone said. “These include mammograms and physical exams. We need these retail customers to fulfill our mission. They pay not only the cost of their care, but the cost of those who can’t pay.”