By Martin J. Kidston
With tough times hitting rural hospitals across the country, Northern Montana Hospital will be forced to reduce the size of its staff, the hospital announced Friday.
In a notice to hospital employees, Hospital CEO David Henry explained the hospitals new challenge as being one of survival, and after reviewing the fiscal strength of the organization, decided to reduce hospital staff by 30 employees.
Henry said the staff layoffs, when benefits are included, will save the hospital between $750,000 to $900,000 a year. Reductions will take place throughout the hospital as opposed to one department and severed staff will receive severance pay, which the Hospital Board of Trustees had approved through a special resolution. But letting employees go is no easy task.
Many jobs which had been previously posted will not be filled, the letter explained. Employees affected by the layoffs will be provided a list of those positions still available in order for these employees to apply for another position they may be qualified to perform.
Henry explained that all programs at Northern Montana Hospital are under review, and added the financial impact of the Balanced Budget Act was the culprit.
When the bill was passed back in 1997, the American Association of Retired Persons and others endorsed the program because it was going to save the federal government and the Medicare program $115 billion, Henry wrote. However, as the program has unfolded over the past few years, it is now expected that the Balanced Budget Act of 1997, will save the federal government an additional $75 billion more than anticipated over the five-year period.
As a consequence, Henry noted that rural hospitals are forecasted to begin running in the red as early as this year. By 2002, the experts estimate that rural hospitals will be operating at almost six percent over budget every year.
Rural hospitals are getting hit harder than the urban hospitals, Henry said, adding that the hospital employs close to 600 full-time employees, and is looking to cut 30 of those positions, or about five percent of hospital staff.