Yukon-Kuskokwim Health Corporation Officials announced layoffs this week due to a $12 million budget shortfall. It’s the second round of cuts in less than a year.
After a recent audit of the organization, CEO Dan Winkelman realized it would take dramatic measures to get the organization that delivers health care to Bethel and surrounding villages back in the black.
“According to our audited financials that just came out we lost almost 12 million dollars in 2013,” Winkelman said. “That’s not sustainable and we had to make a budget correction because of the that.”
Winkelman says 110 employees will be let go, across departments, and 50 more vacant positions will not be filled.
YKHC consists of a regional hospital in Bethel, nine regional facilities and 47 village clinics. The corporation employs around 1,500 people and has an annual payroll of $70 million.
Last fall, around 50 positions were cut. Winkelman, who took over as CEO about three months ago, says the budget shortfall is a result of several factors.
“We didn’t meet our revenue collection goals since late 2012 so that’s had a huge impact to decrease our revenue. Also the federal sequester that occurred last year, that’s effected us and that decreased Indian Health Service’s budget, therefore it decreased our budget as well,” Winkelman said.
Last year the federal sequester by Congress decreased the Indian Health Service’s budget by about 5 percent. That translated to over $7 million in cuts at YKHC, Winkelman says.
In addition, he says expenses went up because of investments in a new elders home and in a new medical records system. Increases in temporary duty physicians, he says, and YKHC’s employee health insurance costs were also a factor. He’s working to correct inefficiencies in their revenue collection systems as well.
Winkelman says YKHC does not plan to lay off any doctors but reductions will be made companywide, and village clinics will be impacted.
“Human Resources is going to be working with out managers to determine that,” Winkelman said. “This is going to take approximately 30 days, the next 30 days to implement.”
“It’s a large layoff so its going to take a lot of administrative time to complete it. Individual employees are going to be notified June 2ndthrough the 6th, so the first week of June and we’ll go from there.”
Severance packages will be offered to all employees who are laid off.
Forty-million-dollars in Indian Health Service settlement money recently awarded to YKHC for unpaid contract support services between 2005 and 2011 will not be used to shore up the budget, Winkelman says. Instead, he and the YKHC Board are safeguarding that money for the future.
“We’re thinking out long-term and part of our long-term strategy is to use those funds in addition to some other funds to try to get us a new hospital as well as a new primary care center,” Winkelman said.
Existing facilities in Bethel, built in 1980 are getting run down, Winkelman says, and the population they serve is growing. The new settlement money will be added to an investment account containing 40 million dollars from a previous IHS Settlement for a total of around $80 million.
With the layoffs, a spokesperson for YKHC says patients can expect a decrease in access to appointments, longer wait times and fewer services.
Winkelman says, even with the cuts, he projects YKHC will lose over 3 million dollars this year. However he does not anticipate any more layoffs at this time.
Thursday YKHC President and CEO, Dan Winkelman, released thisstatement explaining the layoffs: