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Fairview job cuts are latest for area health care
Uninsured patients and higher deductibles of the insured are increasing unpaid bills at some local hospitals and clinics.
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In a sign that health care isn't immune in a bad economy, Fairview Health Services said Monday it is laying off 150 to 200 employees.
The owner of the University of Minnesota Medical Center, Fairview Southdale Hospital and other Twin Cities medical facilities said the job cuts are across the board and will occur through October.
The reductions represent less than 1 percent of the workforce. Fairview is also cutting overtime and delaying some maintenance projects.
As it has for companies in other industries, the turbulence on Wall Street has slashed the value of Fairview's investment portfolio and raised the cost of borrowing money.
But health care also has its own special problems: cuts in reimbursements from Medicaid and a rising tide of unpaid medical bills from the uninsured and the underinsured -- those who have insurance but can't pay their deductibles.
In addition, Fairview said it is losing some business as more patients with large deductibles put off elective procedures.
"It is a big deal, particularly if people are deferring needed services," said Fairview chief executive Mark Eustis. "If you defer too long, you end up with a greater problem. ... [They'll be] coming to us in need of greater care."
With the downturn, Eustis said Fairview may consider delaying some projects, such as upgrading its main lab and its information technology systems. Construction of Fairview's new children's hospital in Minneapolis will not be affected by cuts, he said.
Unpaid bills
Patients at Fairview left $32.3 million in unpaid bills between January and August this year, up $7.1 million compared with the same period last year. The number of inpatient admissions was down 1.3 percent, which works out to 710 fewer admissions, partly because more procedures are now being done on an outpatient basis. But clinic volumes are up, as are visits to the emergency room.
Other medical groups haven't been spared. Last week the Twin Cities' biggest medical group, Allina Hospitals and Clinics, said it was eliminating 250 to 350 jobs, or 1 to 1.5 percent of its employees, because of financial pressures.
Regions Hospital in St. Paul, part of HealthPartners, last week cut 30 full-time equivalents, partly through layoffs and partly by not filling current vacancies.
HealthEast Care System in St. Paul, which has St. Joseph's Hospital and St. John's in its network; Park Nicollet, which owns Methodist Hospital in St. Louis Park, and North Memorial Health Care in Robbinsdale said they had no plans to cut jobs.
But they, too, are seeing a rise in unpaid bills. At North Memorial, uncompensated care so far this year is $29 million, up 35 percent from the same period last year, said spokesman Robert Prevost.
At Children's Hospitals and Clinics of Minnesota, emergency room visits are up 3.3 percent compared with last year, "generally an indication of economic stress," said spokeswoman Trudy Marshall. Medicaid, known as Medical Assistance in Minnesota, now represents 40 percent of payments to Children's, up from 30 percent a year ago.
Chen May Yee • 612-673-7434
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