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Mary Washington Healthcare lays off 66 workers

Mary Washington Hospital in Fredericksburg, Virginia.  FILE / REZA A. MARVASHTI / THE FREE LANCE-STAR

Mary Washington Hospital. FILE / REZA A. MARVASHTI / THE FREE LANCE-STAR

DOCUMENTS: See a memo from MWHC CEO Fred Rankin, III to employees, and a question-and-answer sheet about their staff reductions

BY AMY FLOWERS UMBLE

THE FREE LANCE–STAR

Mary Washington Healthcare cut 66 jobs Wednesday as part of an ongoing effort to pare $30 million in expenses. The layoffs were effective immediately.

The system trimmed the paychecks of another 46 employees, whose hours are being reduced.

And 157 additional workers will be transferred to other jobs within the system.

“This is a difficult day,” Chief Executive Officer Fred Rankin said in a statement. “Right now we’re doing everything we can to help each of the associates who lost their jobs find other opportunities.”

The not-for-profit company operates two local hospitals and employs about 3,400 people. The cuts represent about 2 percent of the system’s employees.

The lost positions were mainly in support fields and were divided between both Mary Washington and Stafford hospitals, said Eric Fletcher, senior vice president of strategy, marketing and business development for MWHC.

“The cuts were weighted toward non-patient care positions,” he said. “We’re really providing great care and will continue to do so.”

The 66 layoffs included four vice president positions.

Employees learned about the layoffs throughout the day, in a series of small departmental meetings.

“This came as a complete shock,” said a worker who wished to remain anonymous. “Everyone had their mouths open.”

Employees who lost their jobs were offered severance packages of six to 16 weeks, depending on length of employment. They were also offered career-counseling services, Fletcher said.

In the meetings, employees received letters detailing the company’s latest cost-reducing measures. The letters blamed the layoffs on “significant cuts” to the hospitals’ payments for patient care.

MWHC will get about $31 million less this year in Medicare reimbursements because of a variety of factors, Fletcher said.

Medicaid expansion could help MWHC’s bottom line by about $14 million annually—enough to recoup some losses from Medicare reimbursement cuts. But Virginia legislators seem unlikely to expand Medicaid coverage to the 400,000 state residents who would qualify.

The Fredericksburg-based health care system lost almost $8.2 million in 2013, according to an audit released this spring.

MWHC tried to close that gap by negotiating with vendors and insurance providers, freezing hires in some departments and cutting supply costs, Fletcher said.

According to the letter, signed by Rankin, more cuts were needed.

“We’ve worked very hard to try to make this reduction a one-time event,” the letter stated. “Although we can’t guarantee we’ll never have to make this action again, we can say that it is unlikely in the near future.”

The layoffs came a week after a report showed that nonprofit hospitals across the nation lost record amounts of money last year.

The report from Moody’s Investors Services stated that nonprofit hospitals lost more money than larger, for-profit hospital systems.

Still, Fletcher said that MWHC’s board remained committed to being a small, locally owned health care provider.

“These cuts are to make sure we’re strong and viable,” Fletcher said, “They are part of our journey to continue to remain independent.”

Amy Umble: 540/735-1973

aumble@freelancestar.com

Memo to employees from MWHC CEO Fred Rankin, III

Mary Washington Healthcare staff reductions memo

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