Ballad Health Chairman and CEO Alan Levine informed employees of the move.
“Last September, prior to the merger (of Mountain States Health Alliance and Wellmont Health System), we shared publicly that there would likely be some duplicative administrative and support positions that would be eliminated following the merger, ranging from senior executives to management to front line positions. At that time, we estimated that approximately 250 positions would be impacted,” Levine said.
“Since the beginning of February, through natural attrition, we have seen a reduction in 49 of these positions. This week, we will be communicating with approximately 150 team members that their current positions are being eliminated. While I am glad that the number of affected positions is less than we originally estimated, these changes will still affect 150 of our colleagues, and there is no way to describe this action as anything other than very challenging for the team members involved and their families. It is likely not of comfort to those affected when I say that if our two legacy health systems had not merged, both would likely have joined larger systems based elsewhere, and the impact would have been closer to 1,000 lost jobs. But we believe this to be true, and the evidence supports it.”
Levine pointed out that prior to the merger, the combined operating income of the two systems fell from a $25.1 million operating gain in the first six months of fiscal 2017 (July-Dec. 2016) to an operating loss of $2.6 million in the first six months of fiscal 2018 (July-Dec.2017).
“This financial pressure is consistent with national trends, particularly in the non-urban, non-suburban markets throughout America where economic and population growth have not seen the same recovery as the more urban and suburban areas,” Levine noted. “More than 80 rural hospitals have closed, and hospital closures have been announced as recently as the last few months. The Mission Health System in Asheville, one I know many of you are familiar with, announced a few weeks ago that it is selling all of its assets to a for-profit hospital chain — where its stakeholders will no longer be the local community, but rather Wall Street investors. The reality is that small hospital systems are disappearing and being replaced with large, national systems that centralize many of their functions to decrease costs and seek to increase pricing to their customers.
“It has been reported that 44 percent of America’s rural hospitals operate at a loss. Our situation is no different. Thirteen of Ballad Health’s 21 hospitals are rural, and many of them operate at a loss. These hospitals are still precious assets to the communities they serve, and we are committed to their success. Our ability to continue providing access points to the hundreds of thousands of people in our region served by those community assets requires that we find ways to decrease costs where they are duplicative and then reinvest those savings in services that are needed but not currently offered. … I also want to be very clear in saying we are continuing to work to fill our more than 700 open positions, most of which are clinical and half of which are in nursing.”
Supervisors and human resources staff will be meeting with the affected team members over the next few days to let them know about these decisions, Levine told system employees.
“I want to assure you our goal is to treat every team member with dignity and respect, and we will do our best to help ease the transition for those who are being displaced,” he said. “We will be offering severance packages as well as comprehensive outplacement services, including job placement assistance both inside and outside of Ballad Health. Certainly, the people affected will be encouraged to apply for open positions for which they qualify. … Every one of us matters, and when a decision like this is made, it weighs heavy on all of us. Please keep our colleagues in your thoughts and prayers.”