Hutcheson lays off 75 employees

Hutcheson lays off 75 employees

April 5th, 2011 by Joy Lukachick Smith in News

Gina Harrison is pictured in front of Hutcheson Medical Center in Fort Oglethorpe on Monday, the day she was laid off from her job as a technician. The hospital laid off a number of employees on Monday. Staff Photo by John Rawlston/Chattanooga Times Free Press

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After months of festering rumors and uncertainty among the Hutcheson Medical Center staff, Gina Harrison's nightmare came true.

When Harrison received a call from her boss on Monday - her day off - asking her to come to a meeting at the hospital, she knew she was about to lose her job.

"I'm not in shock because I knew it would come," said Harrison, 41, a custodian at the hospital for four years. "But they could have been upfront with us. We've been in the dark the whole time."

Harrison was among 75 employees who were told to pack their belongings before they were escorted from the Fort Oglethorpe hospital on Monday with little notice.

For the last several months, rumors have circulated among the Hutcheson staff about whether the hospital would lay off employees, go bankrupt or partner with Erlanger Health System in Chattanooga, Harrison said.

The layoffs came one day after three of the hospital's four oversight boards voted unanimously to accept a finalized contract with Erlanger, moving one step closer to a partnership, and lifeline for the financially troubled North Georgia hospital.

Hutcheson and Erlanger have been negotiating for months on a plan that would pump money into the struggling hospital. Hutcheson has been losing $1 million a month, and it has defaulted on a $35 million bond. The 195-bed hospital also has struggled to keep doctors admitting their patients.

Before the layoffs, Hutcheson had 900 employees and was averaging 30 to 40 patient visits a day, said Haley Johnson, a hospital spokeswoman.

The hospital has lost millions in the last three years, according to financial records.

With a recommendation from Plano, Texas-based consultant Community Hospital Corp., Hutcheson officials decided to lay off 75 employees - about 8 percent of the work force - to help financially stabilize the hospital, Johnson said. Hutcheson hired Community Hospital Corp. last year to help the hospital deal with its financial problems.

The monthly savings from salaries and benefits from the layoffs will be $285,000 a month, or $3.4 million a year, Johnson said.

Those affected by the layoffs were given a two-week severance package that officials said includes accrued paid time off.

In contrast, former CEO Charles Stewart, who resigned in February, was given a $325,000 severance payout to be distributed over the next 12 months. He also earned a $69,000 bonus for the 2010 fiscal year in which Hutcheson lost $7 million.

Hutcheson board members contend the layoffs were necessary to keep the hospital afloat.

"This is something that has been building for several months," said Jim Emberson, a member of the Hutcheson board. "It's obvious we have an overage of personnel."

Hutcheson Medical Center board Chairwoman Martha Attaway was not available for comment because she is out of the office all week. She didn't return emails seeking comment.

Interim President and CEO Debbie Reeves said in a news release that the cuts were a last resort because of the hospital's financial state.

"We had to implement this difficult task of aligning our staffing levels to meet our patient volumes," she said.

Harrison said another whisper going around Hutcheson is that this is only the first round of layoffs.

Board members declined to comment on what might happen in the future.

Walker County Sole Commissioner Bebe Heiskell said she is not surprised.

"We've known this was coming," she said. "There'd been talk of this since October. There was talk of 200 people being laid off."

Heiskell has been an outspoken critic of the management proposal from Erlanger. One of the prerequisites for the partnership is that Walker County must guarantee loans needed to keep the facility operating. Heiskell said she is unwilling to put county taxpayers on the hook for that money.

"I want the hospital to be viable. They do need someone to come in and manage it properly," she said. "I just feel like this is too much to ask."

But several officials who are in favor of the partnership with Erlanger argue that this week's layoffs could have been delayed or perhaps avoided altogether if a decision about new management had been made more quickly.

"We've been standing around, watching the barn burn and arguing who's going to pour the water on it," said Leonard Fant, chairman of the Hutcheson Health Foundation's board, one of the hospital's four boards.

Meanwhile on Monday, Hutcheson workers huddled together, peeping their heads out of windows as several laid-off workers walked to the parking lot with their belongings in hand.

Employees shook their heads when questioned if they knew who was being laid off.

"It could be me for all I know," an employee said as she walked inside the hospital.

Contact staff writer Joy Lukachick at jlukachick@timesfreepress.com or 423-757-6659.