Boone Hospital Center has announced that it was forced to lay off 50 employees. The Columbia, Missouri-based hospital cited high-deductible health insurance plans as the reason for the terminations. According to the hospital website, Boone employees over 2,000 people, with 350 physicians on its medical staff.
Boone Hospital Center is a 397-bed full-service hospital that provides healthcare programs, services, and technology to those living in 25 mid-Missouri counties. While Boone is a full-service hospital, it is known for its cardiology, neurological, oncology, surgical, and obstetrical services.
Boone Hospital Lays off 50 Employees in Columbia
Boone Hospital Center announced it jettisoned 50 positions, blaming the move on declining numbers of inpatients and government payments. The laid-off employees were mostly in managerial and support roles; no doctors or nurses were affected.
Jim Sinek, CEO of Boone Hospital, said that those employees losing their jobs are “farther away from the bedside.” He refused to elaborate because some employees had not been informed that their jobs were made redundant.
“We want to make sure that everybody has had an opportunity to have those conversations first before anyone else would find out or know — that’s just our policy, we want to make sure we’ve fleshed all that out first,” Sinek said.
The laid-off employees will receive “comprehensive severance” and help to find a new job. The hospital did not specify what kind of severance the 50 laid off employees will receive.
In fact, Boone Hospital spokesperson Ben Cornelius refused to say how much money the layoffs would save, the hospital’s total personnel costs, how employees were notified of the layoffs, what the severance packages are, how much the hospital’s inpatient numbers and government payments have declines, what else Boone is doing to cut costs, and whether additional layoffs are coming.
Sinek was a little more forthcoming. Regarding the future of Boone Hospital Center, he said no more layoffs are planned. And layoffs are not an uncommon occurrence at Boone; the hospital also slashed its workforce in 2008 and 2012.
The hospital also said that the country-owned medical center will shutter its inpatient pediatrics nursing unit. No time frame was given with regards to when that would happen or if it would lead to additional layoffs.
Boone Hospital is the fifth-largest employee in the five-county region, which consists of Boone, Callaway, Cole, Cooper, and Audrain.
The recently announced layoffs at Boone come as the hospital’s board of trustees continue to negotiate with University of Missouri Health Care for a possible merger. Boone Hospital is currently managed by BJC Health Services under a lease agreement that ends in 2020. The trustees and St. Louis-based BJC have until the end of 2018 to notify each other whether they want to continue the least or allow it to lapse.
There is clearly some tension between the two camps. A number of trustees said the staff cuts came from BJC and that the board had no say in the matter.
“We’re the top-ranked hospital in mid-Missouri and those 50 people that lost their jobs today, they’re a big part of that, and to no fault of their own they’re out of a job,” board chairman Brian Neuner said. “We are very disappointed. We communicated that to local administrations, and we went to St. Louis and said ‘can you find another way?’ So this is where we’re at and we’ve got to work together to move forward.”
Negative Impact of High Deductible Health Insurance Plans
Boone Hospital Center said the layoffs are a result of declining patient volumes and more patients with high-deductible insurance plans that avoid hospitalization.
“As the government reduces spending to address the budget deficit, payments to hospitals, including Boone Hospital Center, are declining,” the hospital said in its statement.
Boone Hospital is like many community hospitals across the U.S., feeling the negative impacts of lower hospital admissions. The facility has also seen a rise in patients with Medicare and Medicaid, which pays less than employer-sponsored insurance.
As is evidenced by the recent layoffs at Boone Hospital Center, the rise of high-deductible health plans is cutting into hospital inpatient volumes and reducing already thin margins that benefits from the Affordable Care Act, often referred to as “Obamacare.”
Patients are also avoiding elective surgeries and other procedures because of rising out-of-pocket costs.
Up until a year ago, hospital admission was climbing at a rate of about three percent to four percent annually. But that rate has slowed to just one percent to two percent as the number of newly insured has flatlined.
The decline in hospital admissions is being partly offset by critical specialties like cardiology and neurology. But because of fewer elective surgeries, inpatient numbers are down. The reason? Americans simply cannot afford them.
The increasing popularity of high-deductible insurance plans has made it much more difficult for hospitals to hold on to their declining profitabilities. In 2016, for the first time ever, at 51%, the majority of all American workers with single coverage had a deductible of at least $1,000. A full 29% of workers were in high-deductible plans, compared with just 20% in 2014.
Because of rising hospital costs, razor-slim margins, and an increasing number of high-deductible health insurance plans, cash-strapped Americans will make fewer trips to the hospital.
In order to cut costs, hospitals and medical centers across the U.S. will have no choice but to continue with the raft of layoffs.
“About Us,” Boone Hospital Center, last accessed October 3, 2017.
“Largest Employers By County,” Missouri CORE, last accessed October 3, 2017.
“Boone Hospital Center lays off 50, to close inpatient pediatrics nursing unit,” Columbia Missourian, October 2, 2017.
“Boone Hospital to lay off 50 workers,” Columbia Daily Tribune, October 2, 2017.
“Hospital volumes laid low by high-deductible health plans,” Modern Healthcare, August 10, 2017.