Summa Health System reportedly began notifying some employees on Tuesday that their jobs were being eliminated.
At least 30 people were told that their positions were cut during meetings held with staff throughout the day, according to an official with the American Federation of State, County and Municipal Employees Local 628. The official was not authorized to speak about the layoffs and declined to be identified.
At least six of the people who were laid off are members of the union, which represents nearly 400 nursing assistants, orderlies, technicians and support staff in maintenance, medical records, the cafeteria, radiology, laundry and the pharmacy at Summa Akron City Hospital, according to the union official.
When asked about the layoffs, Summa spokesman Mike Bernstein responded: “We have not formally announced any reduction in staff. In the event that were to happen, we will notify our employees before commenting publicly.”
Summa is Summit County’s largest employer, with a workforce of about 11,000 if partially owned and affiliated ventures are included.
The apparent staffing cutbacks mark Summa’s second round of layoffs this year as the health system contends with lower-than-expected revenues and prepares for federal health reform.
The health system laid off 54 employees in January to save nearly $4.5 million.
Hospital officials said at the time that the layoffs were part of Summa’s ongoing, 10-year performance improvement plan, which was launched in 2011 to reduce the health system’s expenses by about $966 million over the next decade. The initiative started after an analysis showed impending changes from federal health-care reform could cost Summa from $200 million to $950 million in revenue over 10 years.
The financial improvement plan includes everything from reducing supply costs to earning federal incentive payments for implementing electronic medical records.
Summa owns and operates Akron City, St. Thomas, Barberton and Wadsworth-Rittman hospitals, as well as SummaCare insurance, a physician group and other businesses. The health system also has an ownership stake in Summa Western Reserve Hospital in Cuyahoga Falls.
The latest round of possible staff cuts come as Summa is failing to meet its budget targets, according to the health system’s most recent financial statement.
The health system’s reported total revenues exceeded expenses by $12.4 million for the first six months of this year — an amount that’s nearly $9.7 million less than budgeted and $2 million less than was achieved the same time period last year.
Summa reported an operating margin of 1.3 percent in 2012, rather than the 3.2 percent margin it had hoped to achieve.
During an interview in January after the first round of layoffs, Summa President and Chief Executive Thomas J. Strauss attributed the missed budget targets to industry trends toward lower-paying observation days instead of inpatient days, decreased inpatient volume, increased charity care and more patients delaying care because of high deductibles.
The health system is in the process of finalizing a $250 million deal with Catholic Health Partners (CHP) that will give the Cincinnati-based non-profit hospital system a minority ownership stake in Summa.
Summa initially plans to work with CHP on four key areas: reducing the average length of stay for inpatient services, improving billing and collection, boosting productivity and reducing supply costs.
Hospitals throughout the nation are cutting costs as they anticipate reductions in payments from Medicare and Medicaid, which represent more than half of the revenues at most hospitals, according to industry experts.
Akron General Health System — Summit County’s second-largest employer — also laid off 132 employees in February as it contended with a $4 million loss in 2012 and anticipated future financial challenges from health-care reform. The layoffs were part of an overall workforce reduction of 250 full-time employees, according to a recent report from credit rating firm Standard & Poor’s.
Cheryl Powell can be reached at 330-996-3902 or firstname.lastname@example.org. Follow Powell on Twitter at twitter.com/abjcherylpowell.