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Gila Regional Seeks Expense Reduction in Changing Times

Changes in the healthcare landscape have created a challenge for rural hospitals across New Mexico, and to a varying degree, throughout the country. The challenges include the growing shift from inpatient care to outpatient care coupled with the extreme reduced payment reimbursements currently adopted and proposed by Medicare, Medicaid and the State Sole Community Providers funds. These challenges are then compounded by the increased numbers of uninsured and underinsured patients in our region.

In this fiscal year, Gila Regional Medical Center has lost significant amounts of money as a result of reimbursement cuts and volume declines. Cash flow has declined significantly as a result of a federal decision to hold reimbursements of money required for indigent and sole community hospital funding. In response to these continued conditions, Gila Regional is making a variety of adjustments.

“GRMC has had to deal with these fiscal realities without compromising our commitment to quality care and community need,” Gila Regional Medical Center (GRMC) Chief Executive Officer Brian Bentley said in a prepared statement.

Recognizing that the near future holds more fiscal difficulty, Gila Regional leadership has created Operational Restructuring Project Teams. These teams have been reviewing organizational structures, systems and processes for non-vital expense control. Many of these restructuring measures have reduced operational expenses; the results will be realized during the upcoming fiscal year.

Other measures taken include bringing to a halt our expansion/renovation project and returning the borrowed $10 million funding. GRMC has postponed the Meditech (Health Information System Software) conversion project resulting in a savings of $1.8 million in capital and $500 thousand in training expenses. Over $1.5 million in non-salary savings have been identified and approved for implementation.

“Although our caregivers have done a great job to be more efficient and effective, we believe additional changes are necessary,” stated Bentley. “These are not easy changes to make. These transitions will help us continue to serve our community, providing quality care for generations to come.”

Because of reduced payment reimbursements, the need to close Home Health Services in Luna County, Home Health’s Disabled & Elderly wavier and Helping Hands programs in Grant County has become apparent.  “A thorough analysis of this service line and program has shown that these services are duplicated in the community by other sources, which will lessen the impact of this closure.” stated Bentley.

After enacting the above expense reduction measures, the last resort has been reached –the implementation of a reduction in hours for approximately 70 caregivers with an impact of  $3.1 million.  These positions will be changed from full-time to part-time status effective May 19, 2013.

“The careful monitoring of vacant positions and positions open due to attrition has allowed us to minimize the number of caregivers that will be affected by a status change/reduction in hours," stated Bentley.

The strict expense reductions are not expected to change the safe and appropriate care provided at Gila Regional.

Bentley stated, “Our strategy is not just about cost reduction; it is about positioning GRMC to grow in the ever-changing health care market. I believe this is the best way for us to continue our commitment to serving the health care needs of our community.”

The total impact of all the items is a $4.6 million dollar expense reduction.

“We realize that change is always difficult but necessary. Gila Regional has a distinguished 129-year history.  We will continue to place our emphasis on ensuring the highest standard of patient safety and providing the best and most compassionate patient care,” Bentley stated.

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