Salem Hospital Upgrades its Electronic Medical Records System
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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I think Mr. Gruber greatly underestimates how many hospitals have and will reach meaningful use. I commend him and the hospital for implementing this but he is not a trailblazer,
I think it's fine for Mr. Gruber to decide to invest in the Epic system -- I just thought it was important to point out his recent decision to impose layoffs since both decisions occurred within a week of each other. Nothing else. I'm also curious to know your name and whether you happen to be an employee of Salem Hospital. Although we do accept anonymous comments, it's always helpful to know a person's identity, particularly when they raise a concern about a critical tone.
Norman Gruber talks about how Epic is going to make the hospital so much money but then he lays off the people who are the most dedicated and the most responsible for making it happen. He let them set it up and get it working then thanked them by sending them on their way. People who have worked their butts off for this hospital for the last 20 years were simply told they no longer had a job. These are people who were truly dedicated to this hospital and making it and it's computer system the best it could be. They went above and beyond and were more than willing to continue doing so. I certainly hope he puts "the enhanced federal dollars that Salem Hospital can anticipate because of its new Epic system" to good use and thinks of the people who made it possible, yet were shown the door anyway, once in awhile.
Pretty easy to be inflammatory, when folks in the know know that operating costs and capital costs are two different animals (The Lund folks should know that). Without capital improvements hospitals can't continue to care for patients into the future. Operating costs must be managed better simply because reimbursements continue to drop. I bet Gruber et al, like execs everywhere, made cuts based not only on upcoming Medicaid cuts (even if it's not 19% it will still be cut) and continued erosion in Medicare and Commercial reimbursement.
Diane: there seems to be an underlying critical tone in your article about Salem Hospital's investment in an EMR system, and I, for one, am dying to understand why. Perhaps its because you link the decision to the recent reduction in workforce due to anticipated cuts in Medicaid reimbursement of 19% in 2011, and 34% in 2012. Readers like me may be interested in what, specifically, you think Mr. Gruber should have done, or not done, in response to the financial and technology challenges his hospital is presented with. Would you clarify by sharing your own opinions with us readers?