By MARLA PISCIOTTA
For The State Journal
For the second time in two years, Valley Health in Winchester, Va. has reduced its workforce.
Thirty-seven employees have been affected, with 33 losing their jobs and four others having their hours reduced in an effort to realign operating expenses.
"Each of our hospitals has seen position loss," Mark Merrill, CEO said.
Merrill said health care is undergoing the same transformation other industries have gone through.
"We'll see turbulence for the next few years," Merrill said.
The reduction of employees is across the organization from support and management to clinic positions.
"Twenty-five percent of those affected are at corporate level," Merrill said.
All six of its acute care hospitals including Hampshire Memorial Hospital in Romney and War Memorial Hospital in Berkeley Springs have been impacted by the cuts.
Valley employs approximately 5,000 and 1,250 of them are residents of West Virginia.
Merrill said the continued payment reductions set forth by the Affordable Care Act has caused payment reductions to the hospitals.
"The sequestration signed by Congress is expected to cause a 2 percent payment cut through 2014 and 2015," Merrill said. "It affects us to the tune of $5 million a year."
In addition, he said Medicaid in Virginia has frozen its rates.
"We are seeing increases of charity care and bad debt," he explained.
Merrill said West Virginia, though, is moving forward with Medicaid expansion.
In the past several years, money didn't seem to be much of a problem. Valley Health built Hampshire Memorial Hospital at a cost of $35 million, War Memorial Hospital at a cost of $35 million and expanded the north campus of Winchester Medical Center in Virginia with a $160 million price tag.
"We are also replacing Page Memorial Hospital, which will cost $35 million," Merrill said.
The staffing reduction includes nine members of management-level staff.
Other changes at the Winchester, Va.-based health system include reducing and freezing the merit awards program and ongoing cuts to travel and other expenses.
"These actions are necessary as we seek to establish a new balance that brings services, staffing and overall costs in line with patient demand and reimbursement levels," Merrill said. "We are committed to serve our communities with high quality and safe patient care."