The effects of sequestration are becoming apparent with at least one health system announcing job cuts and reductions to executive salaries. Elsewhere this week, the legislative fight for nurse-to-patient staffing ratios is gathering steam.
DMC lays off 300 employees
Although healthcare continued its strong hiring trend last in March, sequestration cuts are beginning to catch up with hospitals. Last Tuesday, Joe Mullany, CEO of Detroit Medical Center sent a letter (PDF) to its 12,000 employees announcing hospital-wide cutbacks including the elimination of 300 jobs (2% of its workforce). Mullany cited sequestration's 2% cuts to Medicare funding as the reason.
"DMC needs to address the magnitude of these financial shortfalls this year and in the next several years, finding expense reductions equal to our anticipated revenue reductions," Mullany said in the letter released by DMC. "This work began with our leadership team working with all employees and physicians to identify cost reductions and efficiencies."
DMC, a 2,000-bed integrated academic hospital system, will also make cuts to corporate executive salaries, at the VP level and above in Q4, but details were not released.
These cuts are small in comparison to the $500 million DMC is investing in a construction project related to its 2011 purchase agreement with Vanguard Health Systems. DMC has already opened new facilities, such as a specialty center for Children's Hospital and neuroscience floor at the Rehabilitation Institute of Michigan. Mullany said he is "confident" that investments in these areas will soon bring in revenues that can compensate for the cuts in Medicare and Medicaid.
In the letter, Mullany urged employees to help the hospital further reduce costs by cutting back on photo copies and office supplies.
Nurse staffing mandates proposed
The move to lock down nurse-to-patient staffing ratios in hospitals has been gaining momentum nationally. California is still the only state that mandates hospital minimum nurse staffing levels, but other states are trying to change that.
Last month two Democratic lawmakers in Pennsylvania introduced bills to establish state nurse-to-patient staffing ratios. In Michigan, legislators are working to reintroduce legislation for nurse staffing mandates in their state. The effort failed last year.
In California, Bill S.739 builds on the state's national precedence on this issue. As in the California law, this federal bill aims to apply nurse staffing mandates for all acute and long-term care hospitals that accept Medicare and Medicaid patients. Called the "National Nursing Shortage Reform and Patient Advocacy Act," the bill says hospitals cannot average their patient volumes and cannot impose mandatory overtime to meet the ratio requirements. Violations would cost hospitals as high as $25,000 per incident and $20,000 for individuals.
"We cannot guarantee high-quality healthcare to every American without supporting the nurses who work tirelessly every day to provide it," said Sen. Barbara Boxer (D-Calif.), who proposed the legislation, in a statement.
Hospitals would have to publicly post their nurse-to-patient ratio records for the past two years. The bill also proposes investing in nurse mentoring programs and training in order to teach nurses about working in a hospital. Whistleblower protection is also proposed for nurses who report staffing violations.
Doctors lobby to address CA physician shortage
The physician shortage is another topic receiving legislative attention in California. This week the California Medical Association, state legislators, and the California Academy of Family Physicians (CAFP) proposed a package of five bills to address physician shortage issues in the state through increasing residency slots, funding a new medical school, and encouraging rural placements for young physicians.
In addition to current shortage issues, CMA says the bills will address the care needs of the additional 5 million insured patients in California under the implementation of the Patient Protection and Affordable Care Act.
"Our state's primary care physician shortage will reach a crisis level by 2015," said Jeremy Fish, MD, of the CAFP in a statement. "Already, 74 percent of California's 58 counties have fewer family medicine and other primary care physicians than they need."
Three of the bills are meant to deter young physicians who are trained in California from leaving the state:
- Assembly Bill 1176, lobbied for by both CMA and CAFP, creates a state fund for residency slots in underserved communities, to be paid for by charging insurers $5 per enrollee.
- Assembly Bill 565 would reward more medical school graduates with student loan repayments for practicing in the state's underserved communities for three years.
- Assembly Bill 1288 proposes that the Medical Board of California will prioritize physicians' license applications when they are serving in those underserved communities.
For all of the funding of physicians, none of these bills addresses aligning nurse practitioners, physician assistants, and other allied health professionals in tackling the access to care issues through expanding scope of practice laws or any other initiatives that might increase the presence of those professionals in shortage areas.
When these practitioners are less expensive to train and finish their training sooner than physicians, California should examine further efforts and areas where they can align their needs with this capable workforce.
Chelsea Rice is an associate editor for HealthLeaders Media.
