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KDMC restructures, cuts 148 jobs

KDMC
Aug. 15, 2013 @ 11:44 PM

ASHLAND -- King's Daughters Medical Center cut 148 jobs Thursday, a result of what the administration said was a restructuring of its operations due to declining patient volumes and lower reimbursement levels.

Two Kentucky family care centers in Russell and Pikeville also will be closed effective Sept. 1, hospital officials said.

It is the most recent in a series of layoffs for the medical center, which saw layoffs and shift reductions for more than 100 employees in 2010 and an undisclosed number of layoffs in 2012. Thursday's layoff amounts to a 4 percent reduction in the hospital's employment figures and most affected positions are in support, administration and supervisory areas, according to KDMC spokesman Tom Dearing. Staffing levels for direct patient care remain unchanged. Physicians at the closing family care offices will be relocated to other centers.

Some employees said they were surprised by the extent of the layoffs, while union officials and an Ashland city commissioner questioned some of the hospital's management decisions.

Kathleen Long, an Ashland resident who has worked at King's Daughters since 1992, had heard rumors about possible layoffs at the Ashland hospital.

"I went in to work at 8 a.m. and they called me into the office about 9:15 a.m.," Long said. "I knew what it was. I'm a home health clerk. Two of us work together. I figured it would be one of us. They called me in first. They laid both of us off. It was a shock."

It's not the first time Long has lost a job at King's Daughters. She was laid off last year and was able to get her job back by bumping someone with less seniority. Long, a single parent with two teenage children to support, expects to be back at work in a week or 10 days because she figures her seniority will once again allow her to take a job now held by someone else.

"I don't know what I'll be working on or what I'll be doing, but I'll be fine." Long said.

In a news released issued Thursday, hospital officials said the health care industry is experiencing its worst summer since 2009. They said the issues affecting King's Daughters are the same as those affecting the entire industry, including changing federal and state reimbursements, increasing demand for charity care and a weak economy. Concerns over the uncertainty stemming from the Patient Protection and Affordable Care Act also were cited as a reason for the layoffs. The release stated that some of those affected by the restructuring would be offered new positions through the job bidding process.

Union representatives from SEIU District 1199 WV/KY/OH said 17 of their represented employees were affected: 12 placed on indefinite layoff and five additional workers whose shifts were reduced from full-time to part-time employment.

Joyce Gibson, director of West Virginia/Kentucky Healthcare for SEIU District 1199, said the workers are "deeply concerned" about the future of quality of care at the hospital after nearly annual layoffs since 2009. She also said cuts at the hospital are not inclusive of all departments.

"At some point, you have to stop and think that the cuts at KDMC are coming from the wrong end of the organization," Gibson said, calling the hospital's leadership into question. "Enough is enough. Now is the time for our community to call for [hospital CEO] Fred Jackson to share in the sacrifice."

Rumors that Jackson resigned Thursday or had plans to resign were unfounded, according to Dearing.

Union officials raised questions about Jackson's salary and leadership and how many jobs could be saved by a reduction in administrative payroll. According to the hospital's most recent Form 990, required of nonprofit organizations by the IRS, Jackson's reported wages and compensation were $1.37 million in 2010, up from $1.32 million the previous year. By comparison, a CEO at a Huntington-based hospital earned $725,744, according to its most recent Form 990. Five additional KDMC senior management officials saw a combined $300,000 in increased wages over the same period.

KDMC's financial figures on the 990 form for 2010 showed reported revenue of $551 million, with $513 million in expenses, a difference of $38 million. The previous year's reported revenue of $556 million and $534 million in expenses left a difference of $22 million.

Ashland City Commissioner Kevin Gunderson said the layoffs Thursday, coupled by layoffs in recent years, raises questions about whether the board and management at King's Daughters have overspent on various outreach clinics, some of which are closing.

"They should have focused on their core medical center instead of building outreach centers in Pikeville, Prestonsburg, Flatwoods, Cannonsburg, Russell and South Shore (in Kentucky) and Jackson, Ironton, Burlington and a large one in Portsmouth," Gunderson said. "I just drove by there today, and they had people out planting shrubbery."

This week's layoffs are the latest in a string of woes for the hospital, which lost its contract with Medicaid managed care organization CoventryCares in late 2012. King's Daughters is also under a Department of Justice investigation into its cardiac program. Jackson addressed that investigation, along with answering questions pertaining to the layoffs, in an email sent to hospital employees on Thursday.

"The Medical Center has cooperated fully in the Department of Justice review of our cardiac program for many months by producing requested documents and making people available for interviews. We are not permitted to make further public comments until the matter is resolved. We have not received an indication of a potential resolution date," the email said.

In Jackson's email, he also expressed that Thursday's decision was a difficult one to make and that he understood the impact the decision would have on the community, the employees and their families.

"This was a very difficult decision to make. Together, we have done everything possible to avoid this situation, including cutting operating expenses, combining areas where that made sense and improving our operations through Process Innovation. Those efforts -- and your sacrifices -- have helped us greatly," Jackson said. "... (I) do not take this lightly."

The Herald-Dispatch reporters David E. Malloy and Bill Rosenberter contributed to this report. Follow H-D reporter Beth Hendricks on Facebook or Twitter @BethHendricksHD.

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