McLaren President: 'Affordable Care Act contributed to layoffs and cuts'
For the first time, McLaren Northern Michigan's President and CEO David Zechman is talking about the layoffs and cuts his hospital announced wednesday.
He is putting part of the blame on the Affordable Care Act and new provisions that he says are hurting the hospitals bottom line.
McLaren's recent layoffs join an alarming trend around the medical industry.
According to the U.S. Labor Department, 4,500 hospital jobs across the country were eliminated in January.
"It was something that we had no choice to do, in order to maintain our level of services that supports the greater health of this area," Zechman said.
Zechman says it's partially due to patients co-pay and deductibles going up, which has caused many to limit the number of times they visit the doctor.
"Many patients are just not coming in for care or they're waiting until they're very, very sick," Zechman said.
But he says the biggest dent in the budget came through Medicaid and Medicare services, changes made in the Affordable Care Act. The federal government is reimbursing these hospitals less for their services.
"We still have the same cost of taking care of a patient, but it's hard to keep doing the same things you're doing if you're paid less for the same amount of services you provide," Zechman said.
Other hospitals in the region, like Munson Healthcare says they too are dealing with similar issues.
"Changes at the federal government level will cut about $150 million over the next 10 years from our budget, so what we are trying to do is be proactive," Edwin Ness, Munson President and CEO said.
Ness says there are no immediate plans for staff cuts, but he says that many cost cutting measures are being taken now to make sure they aren't faced with a more difficult decision down the road.
"Whatever happens with the affordable care act, if our costs are low and inner quality is high we will be well-positioned," Ness said.