At almost the same time, the hospital system announced its first round of layoffs to save $3.2 million
May 4, 2011 – Norman Gruber, CEO of Salem Hospital, proudly announced the launch of a major upgrade to its Epic system earlier this week, enabling the hospital to have the most advanced electronic medical tools.
According to unconfirmed estimates, the hospital spent $48 million – if not more - on purchasing the entire Epic software system. By doing these upgrades, Gruber anticipates the hospital should be able to garner another $14 million in federal funding within the next five years.
Yet, less than a week ago, Gruber also announced the first round of layoffs because of anticipated Medicaid cuts. He eliminated one vice president and 15 other director or manager level positions, saving $3.2 million. By July 1, he plans to cut close to another $7 million from his budget.
Gruber’s decision came in response to Gov. John Kitzhaber’s proposal to reduce Medicaid reimbursement by 19 percent because of budget deficits.
However, no hard decisions have yet been made by the legislature to impose such reductions, and there’s serious talk about increasing the provider tax that hospitals and other providers pay to support the Oregon Health Plan. Right now, these discussions are occurring behind closed doors.
In an email sent to his staff about the upgrades to the Epic system, Gruber didn’t hesitate to sound optimistic about his hospital’s financial future. Here’s what he told them:
“In fact, no other healthcare provider in Oregon has reached this level of electronic medical records. We’re also one among only 169 hospitals in the U.S.—3.5 percent—this advanced. Total hospitals number about 5,275.”
He added, “We’re not just leaping into the future—we’re leading the pack,”
Gruber also mentioned the enhanced federal dollars that Salem Hospital can anticipate because of its new Epic system: “We’re also in the handful of hospitals that qualify for financial federal incentives to use EMR in a meaningful way, called ‘meaningful use,’
or MUSE. We estimate we’ll receive $14 million over the next five years. Other systems not this advanced will begin receiving reductions to Medicare reimbursements in a few years.”
FOR MORE INFORMATION
To read the announcement by Norman Gruber announcing the staff layoffs, click here.
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