A number of cost-cutting measures were discussed by Warren General Hospital CEO John Papalia during WGH's board of directors' public meeting held on Wednesday.
He spoke of the year as being challenging, losing $1.7 million in net revenue when its Medicare Dependent Hospital status was revoked.
"Our Medicaid payer population has climbed in the past ten years by 11 percent. This has a significant impact on Warren General Hospital as the payments from Medicare and Medicaid decline," he said.
Papalia said that maintaining an aging infrastructure costs between $4 million and $5 million each year. "The Cancer Care Center will replace the linear accelerator in upcoming years at a cost of two million dollars."
"In order to increase productivity and become a leaner organization, Warren General Hospital implemented a number of cost-cutting measures including limited workforce reductions across the organization, and a critical review of all expenses, purchases and service contracts," he said. "In doing so, Warren General was able to cut $3.9 million in costs."
"Warren Medical Group was included in the recent re-structure as well. The decision affected five practices. The practices include Dr. Monika Juszczyk, Dr. Paul Bialas, Dr. Lee Denlinger, Dr. Nicole Harrison and Dr. Jay Endres," he said.
Papalia noted that the physicians returning to private practices can retain their privileges to treat their patients in the hospital by going through a credentialing process. Board member Dr. John Sutton clarified it as a re-credentialing process.
A committee composed of the medical staff would make recommendations to the medical executive committee, which would decide if the physicians met the criteria and forward the recommendation to the hospital board to grant privileges to work inside the hospital.
Will Champlin, a Warren resident attending the meeting, asked Papalia if there wasn't another way to achieve the savings. "How many dollars would it take to keep some of these doctors?" he asked.
Papalia prefaced his answer, saying that the Mayo Clinic was laying off people, and the Cleveland Clinic had laid off 3,000 physicians and healthcare providers.
He then outlined what the board had looked at to save money. "Initially, we looked at reducing salaries. The impact... would have been about $324,000. The impact of closing the practices and associated costs with the practices was $1.3 million every year, going forward," he said.
He also noted that because of a decline in in-patient volume, 14 licensed practical nurse positions were eliminated in November.
With regard to the practices, Papalia said the physicians knew it was coming for in excess of two years.