Hospital lay offs, pay cuts and hiring freeze; CEO blames reimbursement rates

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Reporter - Jason Hibbs
Photojournalist - David Dycus

MURRAY, Ky. - Layoffs, pay cuts and an across the board hiring freeze.  Murray Calloway County Hospital is taking preventive measures so they can stay open. 

They let 28 employees go and this is the second round of layoffs in five months.  C.E.O Jerry Penner said because of sequestration, the hospital will likely suffer from a two percent Medicare cut.  Right now, Medicaid owes them $3 million.

Penner expects even lower reimbursement rates because of the Affordable Care Act.

He also said admissions standards are higher, meaning insurance companies are pickier about who gets admitted, so there's a decline in patient volume.

And Murray Calloway County isn't alone.

The news doesn't make Penner proud.

"They're good people, I hated to let them go and now I've got to look at articles like this," Penner said, referring to a local newspaper headline.

Penner said he laid off people in housekeeping, nurses, and administration.

He said an industry once idolized and stable is now turbulent because reimbursement rates keep going down, and so does patient volume.

"It's not a sanctuary anymore," Penner said.

Nursing students, like Kayley Emerson at Murray State University, are learning once they graduate, they'll compete with experienced nurses searching for work.

"It's intimidating too, because you think about all these nurses that've been in the hospital setting for such a long time," Emerson said.

Emerson remains optimistic.

"I feel like if you want it bad enough you can still be able to get a job.," Emerson said.

But at least for now, that job won't be at Murray Calloway County Hospital.

"It really boils down to us making right decisions today to ensure our survivability tomorrow," Penner said.

Penner said his hospital is not in danger of closing, but they have to make tough decisions to stay open. Crittenden Health systems laid off workers last month.

Local 6 reached out to Massac Memorial and Marshall County Hospitals, they don't have any planned lay offs but say they're tightening their belts and feeling the same pain.  The president of the Kentucky Hospital Association said he fears some small hospitals could close.

Penner said his staff-to-patient ratio should stay the same, however if hospitals close or smaller hospitals close specific units, like Murray Calloway County did last October with the geriatric behavioral health unit, people will be driving more miles for healthcare.

Penner said all Murray Calloway County Hospital employees had to take a five percent pay cut, and hourly employees are often sent home early to save money.

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