SENATE DEMOCRATS RESPOND TO LAYOFFS AT MARY WASHINGTON HEALTHCARE

Latest in string of health care job losses show, once again, the importance of closing the coverage gap

RICHMONDContinuing a trend that began with the closure of Lee County’s only hospital and has included staff reductions at hospitals and health systems across the state,  Mary Washington Healthcare yesterday laid off sixty-six workers and reduced hours for forty-six others — jobs that might never have been lost if Virginia had acted quickly to close the coverage gap.

In response, Senate Democrats made the following statements:

Said Sen. Barbara Favola (D – Arlington), “These layoffs show, once again, the high cost of Republicans’ refusal to act. Closing the coverage gap would save hundreds of lives per year, but it would also save jobs. In fact, we could create more than 30,000 jobs — while helping to ensure that endangered hospitals remain open for business. Virginians are suffering because the House Republicans are playing politics with health care.”

Said Caucus Chair Sen. Donald McEachin (D – Henrico), “Eight months ago, Republicans promised a plan to close the coverage gap — and as these layoffs show, their needless delay continues to harm Virginians. Closing the coverage gap would save lives, save money, and save hardworking Virginians’ jobs. The House will have a chance to begin putting things right later this month, and I urge them to seize it. ‘Very late’ is still much better than ‘never.’ ”

Said Democratic Leader Sen. Dick Saslaw (D – Fairfax), “Hospitals have said from the beginning that we need to close the coverage gap, and now — once again — we see why. It’s not too late for us to help up to 400,000 Virginians gain access to health care. At the same time, we could protect jobs, return billions of our tax dollars to Virginia every year, and prevent hospitals from cutting jobs and services.”

BACKGROUND

Mary Washington Healthcare attributes the layoffs in part to a $31 million fall-off in Medicare reimbursements. According to the Free Lance-Star, Medicaid expansion would “help MWHC’s bottom line by about $14 million annually,” offsetting a large portion of those reductions.

Hospitals and health systems across the state face similar pressures, which is why they have warned of layoffs for months:

  • Peter Bastone, CEO of Chesapeake Regional Memorial Hospital: “We'd have to be looking at reductions in force” if the coverage gap isn’t closed. Hampton Roads hospital executives fear that layoffs and painful service cuts are the only way to keep their doors open without the $2 billion a year that Washington has promised to fund an expansion of Medicaid to cover more than 375,000 Virginians living below the poverty line. "We'd have to be looking at reductions in force," said Peter Bastone, chief executive of Chesapeake Regional Memorial Hospital. " [Daily Press, 1/19/14]

In many cases, layoffs have already happened:

  • Wellmont Health System cut fifty positions at three hospitals in Southwest Virginia in June of 2013. This week Wellmont cut 50 positions at Mountain View Regional Medical Center, Lee Regional Medical Center and Lonesome Pine Hospital. A Wellmont spokesman says staffing reduction were spread across a number of departments. The health care provider said the cuts were made due the requirements of healthcare reform, an era of reduced Medicare reimbursements, cuts from the federal sequester and the lack of Medicaid expansion in Virginia. [WJHL, 6/5/13]
  • Wellmont Health System closed Lee Regional Medical Center in October. Despite significant efforts by hospital administrators and the local board of directors to secure its future, Lee Regional Medical Center will join the list of hospitals across the country to close in an era of unprecedented changes to health care. […] The closure is due in part to major cuts in Medicare reimbursements by the federal government associated with the Affordable Care Act and a lack of Medicaid expansion by the commonwealth of Virginia. [Wellmont, 2013]
  • Valley Health laid off thirty-three employees in January. Thirty-three Valley Health employees were laid off today. Valley Health President and CEO Mark Merrill - who is also the Winchester Medical Center president  - said the layoffs were necessary to cut costs in the face of declining patient volumes, payment cuts stemming from the Affordable Care Act and Virginia lawmakers' decision thus far not to expand Medicaid coverage to hundreds of thousands more Virginians. [Winchester Star, 1/8/14]
  • Mountain States Health Alliance eliminated Virginia jobs in January. Medical Health Alliance announced Mountain States Health Alliance, operator of five hospitals in Southwest Virginia, launched a cost-cutting initiative Wednesday that will eliminate 116 jobs, including some in Virginia, and an additional 45 vacant positions. […] “Federal deficits, payment cuts included in the Affordable Care Act, declining volumes, the decision by the Virginia legislature not to expand Medicaid, and other factors have impacted our financial position, and we must respond,” said Chief Executive Officer Mark H. Merrill in announcing the layoffs Jan. 8. [Richmond Times-Dispatch, 1/16/14]

By contrast, closing the coverage gap would create more than 30,000 new jobs and help keep hospitals open for business — two reasons why the Virginia Hospital and Healthcare Association calls closing the coverage gap “our number one priority.”

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