Kent Hospital has laid off all 46 licensed practical nurses and announced that it would outsource its rehabilitation services, as the Warwick hospital grappled with declining patient volume, a move that will decrease available Rhode Island healthcare jobs (click here).
According to ProJo.com, both changes had been in the works for some time, however.
Kent plans to hire 12 registered nurses and some certified nursing assistants to handle the LPNs’ duties.
Kent made $3.3 million less than expected during the first five months of the fiscal year because it had fewer patients coming for inpatient and outpatient care.
The poor economy and changes in insurance coverage have led people to defer elective surgeries such as knee replacements, hospital officials say. The seasonal flu epidemic did not materialize this year, leading to fewer hospital admissions. Competition from free-standing imaging centers drew patients away. And meanwhile, more uninsured people are seeking free care.
“The revenue loss has been dramatic,” said Sandra L. Coletta, hospital CEO.
Only one hospital in Rhode Island was in the black during the first five months of the hospitals’ 2010 fiscal year, which began Oct. 1, 2009, according to the Hospital Association of Rhode Island.
The elimination of the LPN program at Kent had been under discussion for months, Coletta said, but the immediate fiscal stresses prompted the action this week. LPNs have less training and cannot perform as many functions as registered nurses. Most acute-care hospitals have been phasing them out in recent years because limitations on what LPNs are licensed to do led to inefficiencies.
For example, LPNs can take patient information, but are not qualified to assess a patient’s condition. Most of the 2,000 LPNs in Rhode Island work in long-term-care settings such as nursing homes.
The hospital will replace the 46 LPNs with 12 registered nurses and an undetermined number of certified nursing assistants (but the new hires will add up to fewer than 46), for a net savings of $1 million a year. A nursing assistant is trained to give personal care and related health care and assistance but does not have the level of medical training that nurses do.
Kent had 140 LPNs a few years ago, but offered to pay for its LPNs to train to become RNs, Coletta said. The remaining LPNs who lost their jobs Tuesday will receive 12 weeks’ pay and assistance finding another job.
The hospital also expects to save $1 million by transferring management of its 20-bed rehabilitation unit and outpatient rehab services to Rehab Care, a publicly traded company based in St. Louis. Rehab Care has agreed to offer jobs to the program’s 60 employees, but reserved the right to choose its own medical director and top administrators, Coletta said.
Rehab Care, which will take over the program on May 1, runs rehabilitation programs at 1,260 hospitals and skilled nursing facilities in 41 states and owns 34 long-term acute care and rehabilitation hospitals. Coletta said the company has expertise in regulations and best practices, and the ability to attract new patients to Kent.
The hospital is also offering a voluntary early retirement package to the 109 employees who are 62 or older and who have worked at Kent for more than 10 years. Kent will cover their health insurance through age 65 or make a cash payment for those already 65. Early retirees will also receive 12 weeks of pay. Coletta said the hospital does not have a target number of people it wants to take early retirement.
In the fiscal year that ended Sept. 30, 2009, Kent was one of four acute-care hospitals in Rhode Island that ended the year in the black. Kent was also listed as the highest-paid hospital in the state in an analysis of commercial insurance payments by the Office of the Health Insurance Commissioner. Coletta dismissed that report as meaningless because it included only a small portion of the hospital’s revenue.
In any case, the current fiscal year is bringing new challenges for Kent. Because income is usually lower in the first part of the year, the hospital planned to lose $1.4 million in the first five months and make up the loss later in the year. Instead, it lost $2.4 million, potentially putting the hospital $1 million in the hole, Coletta said.
(The losses were less than the $3.3-million shortfall in patient revenues because, with fewer patients, the hospital also spent less.)
Coletta said that Governor Carcieri’s proposed budget includes cutbacks in state funding that would cost the hospital $9 million a year, starting in July.