Will Maryland's Rate Shift Send Tremors Around the Country?

Adventist Healthcare in Rockville is a prime example. The five-hospital integrated delivery network, which serves the Washington, D.C., metropolitan area (as well as northwestern New Jersey), is eliminating nearly 100 jobs. The layoff was announced to employees a week before the Maryland rate changes were made official, but the organization cited the potential changes to hospital rates as among the reasons for the staff cuts .

At Frederick Regional, "We are asking our managers to figure how to stay with their current staffing levels and still create more efficiency, and we'll see how that works," says Mahan. "The thing is, we are balancing our reimbursements against programs that depend on providing good customer service. And if an employee feels they are overworked and stressed out, how happy are they going to be with the patients?"

Financial leaders, take note: What's happening in Maryland may come your way soon. As Medicare reimbursement rates decline and you look for various cost reduction solutions to offset revenue losses, don't forget that the human element could have a whiplash affect on your revenue. Trimming the labor line for immediate savingscan create an overworked staffthat translates into poor patient satisfaction scores, ultimately causing more financial loss through the value-based purchasing program.