Bay Medical Sacred Heart Blames Layoffs on Obamacare

PANAMA CITY - Bay Medical Sacred Heart is laying off nearly 60 people weeks before Thanksgiving and the hospital is blaming the cuts on Obamacare.

In a news release, the Bay Medical says it, like hospital across the county, is being forced to adjust to national healthcare reform.

CEO Barry Keel says the hospital started by consolidating senior level management positions and is now cutting 58 employees, or about 3% of Bay Medical’s staff. The job cuts are primarily in management, clerical and support service areas.

“Although our financial position has improved since last year, we continue to operate at a loss,” said Keel. “We deeply regret having to make this decision, but as leaders, we have a responsibility to our community to carry on the hospital’s mission not only today, but also for generations to come.”

Bay Medical Sacred Heart Health System says a series of changes in healthcare have caused them to lose millions of dollars while providing the same services:

- 2% cut in Medicare reimbursement that took effect April 1 due to federal budget cuts known as “sequestration.” That cut will reduce revenues by $1.5 million over the next year.

- Further reimbursement cuts from Medicare under healthcare reform which, combined with the sequestration cuts, will reduce payments by $4 million annually.

- Change in admission criteria which, as of October 1, classifies many patients as “outpatient” even though they are staying in the hospital. The hospital will now says it provides the same care, but gets paid about 75% less for these patients.

- Decreased inpatient volume due to healthcare reform changes designed to keep people out of the hospital, and high-deductible insurance plans that are encouraging consumers to delay healthcare.

- Rising numbers of patients who do not have health insurance and who have no other means of paying for healthcare

- The Florida Legislature’s decision not to accept federal funding for a major Medicaid expansion that would have provided more funding to reduce Bay Medical’s losses on uninsured patients.

“These are not easy decisions when it impacts so many of our Bay Med employees and it is a painful process,” says Keel. "Unfortunately, these difficult decisions are necessary for us to remain financially viable.”

Full-time employees who have worked at the hospital for more than a year will receive severance packages and a check for all accrued vacation time. Bay Medical says it will work with the employees to help these employees find new jobs.