Citing Millions in Financial Losses, Wheeling Hospital Plans to Reduce Staffing
WHEELING – Wheeling Hospital will begin reducing its staff and plans other cost-cutting measures after the medical center lost nearly $30 million over the past two years, hospital officials announced Tuesday.
In addition to offering buyouts for the staff, hospital officials said they will institute voluntary salary reductions for administrative staff and physicians, and temporarily stop matching employee retirement funds. Hospital officials added layoffs are possible if operating expenses are not reduced enough.
Hospital CEO Douglass Harrison blamed heavy financial losses over the past two fiscal years, along with the COVID-19 pandemic and an impending legal settlement with the U.S. Department of Justice, for the proposed cuts.
“It’s never easy,” Harrison said of the impending cuts. “Trust me.”
Harrison added that the hospital will not survive without immediate changes and eventually will need to secure a “long-term strategic partner” to take ownership. He acknowledged that they are engaged in “ongoing discussions” with WVU Medicine to possibly expand its role. West Virginia University Health System signed an agreement last year to manage the medical center, but the hospital’s board of directors still oversees its operation.
It was not known if the hospital was in negotiations with any other entities to take ownership of the facility.
“For 170 years, Wheeling Hospital has proudly served this region through discipline and prudent management of its resources,” he said. “Because of COVID-19 and the impending DOJ settlement, we have been forced to make the painful decision to eliminate staffing resources.”
In March 2019, the Department of Justice intervened in a whistle-blower lawsuit against the hospital accusing it of violating the Stark Law and the Anti-Kickback statute. The federal government accused the hospital of paying kickbacks to doctors since 2007 and also allegedly made incentive payments to doctors based on how much patient business they referred back to the hospital.
Harrison, who was named hospital CEO in June 2019, cited an impending settlement that he expected would be finalized soon, which would then place “another severe financial impact” on Wheeling Hospital. He did not elaborate on the terms of the agreement, and a spokeswoman for the U.S Attorney’s Office in the Northern District of West Virginia, where the case has been transferred, said she could not comment about ongoing litigation or settlement discussions.
Meanwhile, Harrison said the COVID-19 pandemic has had a $35 million impact on the hospital as elective surgeries were restricted for five weeks until they restarted again in early May. The hospital has received $22 million in federal C.A.R.E.S. Act funding, and has been operating a free drive-through testing center at Wheeling Park since mid March.
“We are hopeful that by acting now, we are assuring that the hospital continues to maintain its viability and clinical excellence to meet the ongoing needs of the community in the future,” Harrison said.
Employees will be offered a buyout that includes a severance, and they have until Aug. 4 to decide whether to accept it, hospital officials said. Harrison said they’ve eliminated about 80 positions through attrition since March, and they’re hoping to trim another 75 to 80 through the buyouts. But layoffs could follow if not enough employees accept the voluntary severance, officials said.
Staffing reductions would likely further stress an already difficult health care situation in the region after the closures last year of Ohio Valley Medical Center in Wheeling and East Ohio Regional Hospital in Martins Ferry. Harrison admitted it will be a difficult transition period with a smaller staff and increased demand with those other closures.
“I truly believe we’ll be able to come out of this better on the other end,” Harrison said.