Wilkes Regional Medical Center is laying off about 45 employees because of current economic conditions and an obligation to invest $48 million in improvements over the first 10 years of its lease with the town of North Wilkesboro, hospital officials said this week.
The cuts are expected to reduce operating costs by more than $2 million a year, the hospital's president, Gene Faile, told North Wilkesboro town commissioners. The town owns the hospital.
The hospital has lost $7.2 million since fiscal 2003 and has had operating losses in five of the last six fiscal years, according to Robert Barber, the interim chief financial officer.
The laid-off employees will remain on the payroll for two more weeks. In December 2008, the hospital had cut employee hours by four hours a week. The new restructuring plan will allow those employees to return to normal working hours.
Many of the layoffs involve the reduction and consolidation of administrative functions. For instance, a single administrative assistant may be assigned to cover two areas instead of one. Staffing levels in some jobs had crept above those in similar-size hospitals, according to Vanya Baker, the hospital's director of human resources.
Wilkes Regional has about 825 employees, making it one of the county's top employers.
The layoffs do not, for the most part, affect nursing, surgical services, the emergency department or home-health services.
Faile told town commissioners Tuesday that the restructuring will make the hospital stronger financially, while not affecting patient care.
Attempts to reach Faile yesterday were unsuccessful.
Over the next few months, consultants will be brought in to evaluate staff practices in nursing, surgical services, the emergency room and home-health operations.
Those areas will be staffed according to the number of patients, which is standard, but the review will make sure that the departments are structured to best meet the needs of patients, according to Carol Hermann, Wilkes Regional's vice president of patient care.
Faile told town commissioners that the layoffs are intended to strengthen the hospital and should not be considered a negative sign.
He said that the hospital's operating costs have to be structured so that revenues can generate enough money to pay for needed investments.
Last year, Wilkes Regional received a certificate of need for a planned expansion and upgrade of its emergency department and the addition of 11 observation beds as part of an anticipated $21.5 million project.
The improvements are part of the requirements of a 30-year lease that the local hospital board signed with the town after a six-month process in 2006 that included community-wide meetings.
By a 3-2 margin, the town voted to keep local control of the hospital, rejecting two other proposals, including a $51 million purchase offer from a nonprofit hospital system.
The local hospital board entered into a management agreement with Carolinas HealthCare Systems of Charlotte, which began overseeing daily operations, finances and overall strategic direction in February 2007. Wilkes Regional also has a partnership with Wake Forest University Baptist Medical Center to develop and support clinical programs, and to recruit medical specialists to the community.
In May 2008, the hospital president and its chief financial officer resigned after Carolinas HealthCare officials said that the hospital was not meeting its profit goals.
Barber was appointed then as interim chief financial officer. Faile was hired as hospital president in November 2008.
Town Commissioner Debbie Ferguson, an ex-officio member of the local hospital board, said yesterday that Faile was not brought in specifically to cut costs.
"I think he is simply here to lead our hospital into a brighter future," Ferguson said.
If the layoffs and restructuring had been put in place six years ago, the annual savings would have made the hospital profitable in each of the least six years, Faile told commissioners.
■ Monte Mitchell can be reached in Wilkesboro at 336-667-5691 or at mmitchell@wsjournal.com.
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