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Hospital Announces Cost Reductions

March 18, 2011


Heywood Hospital Announces Reductions


Heywood Hospital has implemented a cost reduction plan to reduce expenses by $2.1 million on an annualized basis effective March 15, 2011, according to Interim President and CEO David Andersen. The reductions include the elimination of 25.20 FTE’s (Full time equivalents) affecting 24 people.   The Hospital has also reduced non-salary expenses by $500,000 including among other things, the elimination of free Valet parking effective April 1, 2011.


Heywood has experienced a loss from operations of $857,000 for the first four months of the fiscal year which began on October 1, 2010. 


“These are painful cuts and ones which we certainly would have liked to avoid,” said Andersen. “However, it is very important to put the Hospital back on firm financial footing as quickly as possible.”


The Hospital’s revenue has not increased to the level expected for the first four months of the fiscal year due to the harsh winter weather and changes in insurance benefits such as larger co-payments which affect people’s decision to seek care or to undergo surgery or other procedures, according to Andersen. Expenses have also exceeded budget during that same time period.


“Obviously we need to turn that around,” said Andersen.


A number of the positions affected by the reductions were both management and non-clinical personnel. In some patient care areas, the Hospital has actually increased staff in recent months to provide more timely service for patients. 


The Hospital opened the new Watkins Center for Emergency and Acute Care in December of 2010.    Andersen said that the new facility does initially add extra operating cost to the Hospital, but “in the long run, the facility is crucial to enable us to provide the kind of care our community needs and deserves and to position the Hospital for a stronger future,” he said.


According to Andersen, the pressures affecting all hospitals are unlikely to abate. “The external environment suggests that we will continue to be pressured to reduce cost and operate more efficiently.   We have to try to find effective ways to change how we do things to enable us to thrive in this increasingly difficult environment,” he said.


Andersen noted that Heywood Hospital is fortunate to have a number of strengths that will ensure its ability to continue to serve the community in new and better ways. “In my brief tenure here, I have noted how dedicated the staff and physicians are to providing the highest quality of care and service. I have also seen how strongly the community supports the Hospital. These are vital factors in the future success of Heywood Hospital,” he said.


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