Back in the summer, I read about a rally that was staged to stop the planned closing of Muhlenberg Regional Medical Center in Plainfield, N.J., which was part of Solaris Health System. I’ll admit that the reason I heard about it was because one of the speakers was Shaun O’Hara, an offensive lineman for the Super Bowl championNew York Giants.
But while I was drawn to the story because of O’Hara — a well-known figure in my part of New Jersey, where he enjoyed successful careers in high school and college (at Rutgers University) football before his days with the Giants — I stayed with it out of curiosity of whether the impending closure was part of a bigger trend. Sure enough, a related news item revealed that eight hospitals in the Garden State have shut down in the last 18 months. The problem, of course, is certainly not unique to New Jersey. Below is a sampling of some of the reports we’ve seen over the last month or so chronicling staff lay-offs and closings in hospitals across the country:
· University of Texas system is laying off 3,800 employees
· University of Pittsburgh Medical Center is laying off 500 employees
· Medical Center of Central Georgia laid off 208 people, including 17 managers earning an average of $120K
· Fairview Health Services in Minnesota is letting go 150-200 employees
· Beaumont Hospital in Michigan is letting go 500 employees
· Physicians Medical Center Carraway in Birmingham, Ala. is closing
Clearly, other parts of the country are experiencing similar trends. And judging from the numbers, I think it’s safe to say that the troubles many health organizations are facing started long before the stock market took a nose dive. And even for systems that at least appeared to be in good shape before September, it makes you wonder: has the financial downturn been the catalyst of hospitals’ economic problems, or has it merely brought to the surface problems that already existed?
I think it’s very possible that there were already some serious cracks in the healthcare foundation. For years, New Jersey hospitals have had serious “challenges in remaining financially sound in the face of insufficient reimbursement from Medicare, Medicaid and the state charity-care program,” as pointed out in an article published in the Philadelphia Business Journal. And now, with hospitals seeing lower margins, it’s going to be very difficult to hire more staff, upgrade facilities or buy new equipment.
Muhlenberg Hospital has closed — after 131 years of service — but for those whose doors are still open, there’s a tough road ahead. And whether the problems existed before or not, it’s time to address them.
