Wyoming Medical Center laid off 58 workers Tuesday, compounding the woes of a state already suffering from increasing unemployment and a stagnant energy sector.
The job cuts are expected to save the Casper hospital $7.2 million, or 3.4 percent of the hospital’s forecast total expenses this year of $213.3 million.
They come amid a downturn in the local economy, a drop in the number of patients with private insurance and increased competition from the city’s two private hospitals.
In addition to the layoffs, the hospital will leave another 57 positions vacant, CEO Vickie Diamond said. And the hospital reduced hours of 11 employees by anywhere from four to 12 hours a week. Combined, the job cuts and vacant positions amount to 9 percent of the hospital’s workforce.
Wyoming’s unemployment rate rose to 5.5 percent in April. Natrona County posted the state’s second-highest jobless rate, at 7.5 percent.
Officials at the state’s second-largest hospital announced the layoffs during a noon news conference.
They blamed the problem on more patients but less money for services. Payments are shifting from private insurance to an increased number of Medicare, Medicaid and patients with no insurance. They also said Casper’s two private hospitals, Mountain View Regional Hospital and Summit Medical Center, are leaving them with patients on Medicare and Medicaid or no insurance.
The layoffs would have been less severe, hospital officials said, had the Legislature expanded Medicaid.
It is the largest layoff in at least a decade at the 105-year-old hospital. Diamond, the CEO, hopes the cuts will stem the need for more layoffs in coming years. Hospital officials said they do not know when the economy will improve.
No programs that affect patients are being cut.
“We’re taking early action because we want to remain very strong financially,” Diamond said. “What you will see from Wyoming Medical Center in the future is that we will continue to maintain cost efficiencies, and we will continue to grow our business to continue to service the patients in Wyoming.”
The job reductions affected 30 departments at the hospital — from finance and radiology to quality management and central sterilization. No nurses who take care of patients at their bedsides were laid off.
Workers who lost their jobs were informed Tuesday morning, except for employees of the hospital-run daycare, which is closing later this summer. They were given 30 days of pay and benefits. If they agree to the terms of a severance agreement, they will receive another 30 days of pay and benefits, counseling and career transition services.
Wyoming Medical Center’s daycare, Next Generation Learning Center, will close Aug. 30. Last year, Wyoming Medical Center subsidized the daycare by about $300,000. About 55 families used the service. The 17 daycare employees, who are among the 58 employees laid off, have been offered an extra compensation package if they agree to work through the closing date.
The hospital worked with labor attorneys to determine which employees to lay off, Diamond said. They looked at a number of factors including tenure, performance evaluations from October, disciplinary actions and licensing and education. Tenure worked in an employee’s favor. Employees with special skills that the hospital couldn’t do without were also saved.
The 217-bed center had 1,125 employees before the layoffs, according to its website. Even after the cuts, it remains Casper’s second-largest employer, said WMC Board Chairman John Masterson.
The hospital had a higher-than-average staffing level before the layoffs, Diamond said.
“Our new staffing levels put us at the national benchmark of similar hospitals in size and scope,” she said.
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In 2014, the hospital saw over 37,000 emergency room visits, according to tax documents that the Wyoming Medical Center, a nonprofit, submitted to the Internal Revenue Service.
That number will likely increase since the ER cannot turn away people unable to pay. The number of patients without health insurance is expected to rise, as layoffs have increased in Wyoming’s oil, gas, coal and uranium industries.
Hospitals throughout the state provide over $100 million a year in uncompensated care.
In January, such care was expected to cost the Wyoming Medical Center $53 million in this fiscal year, Diamond told the Star-Tribune at the time. But on Tuesday, Wiginton, the CFO, said the costs will had increased and would be $55 million by the end of June, the close of the hospital’s fiscal year.
In addition to treating patients from Casper, the hospital offers specialized services that many Wyoming rural hospitals lack. Wyoming Medical Center draws patients from large swaths of the northern and central parts of the state.
In each of the past four years, the Wyoming Legislature had rejected expanding Medicaid to some 20,000 low-income adults. Diamond and other state hospital officials have argued that expansion is critical to their bottom lines. Many of the people who show up in the emergency room would be Medicaid patients if the state adopted one of the key components of the Affordable Care Act.
Each member of Natrona County’s all-Republican legislative delegation has voted against expansion – including Sen. Charlie Scott, the powerful chairman of the Senate Labor, Health and Social Services Committee. That committee has reviewed the state’s plan for expansion three of the four times it’s been before the Legislature. With Scott chairing the committee – and arguing against Medicaid on the Senate floor – lawmakers have resisted plans for expansion proposed by Gov. Matt Mead, also a Republican, and the Wyoming Department of Health.
If lawmakers had approved expansion, it would have added at least $2 million to the hospital’s bottom line, WMC officials said.
The layoffs would have been less severe had the Legislature expanded Medicaid, said Wiginton, the CFO.
“Any additional reimbursement would improve our financial status,” she said.
Executives and addition
Diamond, the CEO, earned $668,594 in 2014, according to the IRS tax forms. That included $520,175 in base compensation, retirement benefits and other perks.
The hospital pays for her memberships to the Casper Country Club, Casper Petroleum Club and Rotary.
Management — everyone from managers, directors, vice presidents and other executives — had mandatory furloughs of up to 12 days, reflecting a 2 percent overall reduction in salaries. Previously, managers could receive financial incentives for meeting goals. Those were cut. The hospital hasn’t filled open positions in leadership. Four leaders were laid off Tuesday, Diamond said.
In 2014, the medical center opened a new 100,000-square-foot, 48-bed tower to the tune of $43 million. The McMurry Tower has a new mother-baby unit, surgical center and redesigned food and nutrition services department. The addition was paid for through a $20 million revenue bond, hospital savings and private donations.
Diamond said payments for the new construction are on schedule. The addition was needed. The hospital had to offer new services to be competitive in the medical market, she said.
“This is not volumes that are causing this,” she said. “This is payer mix.”