Missouri’s Rejection of Medicaid Expansion Results In Hospital Layoffs

Jun 28, 2013

In a sign of the dramatically changing health care landscape, one hospital that acts as a hub in the rural Ozarks has let 32 employees go, and says it’s unable to fill 12 other positions.  

In addition to the layoffs, Ozarks Medical Center, based in West Plains, said management team members will take a five percent pay cut and many other positions will see their hours reduced.

Ozarks Medical Center serves a high-poverty, 11-county area in southern Missouri and northern Arkansas. The hospital says in a press release that its charity care and "bad debt" rose by $7.7 million dollars in two years. Charity care is care provided to people who don’t have a means to pay, and “bad debt” is care for those who have the means to pay but don’t.

CEO David Zechman said in the release that the April 1 sequestration, or federal budget cuts, means federal Medicare payments to the hospital dropped. And at a hospital where 65 percent of the patients are on Medicare or Medicaid, that’s a significant hit.

Also, Zechman said since the Missouri legislature did not accept the federal Medicaid expansion funding as part of the new health care law, hospitals that serve high-poverty areas know they will have even more cuts looming ahead.

Zechman described the cuts as “painful,” yet “critical” to stabilizing the financial health of the organization.

Zechman said OMC has worked for several months to reduce expenses through other means, but that payment cuts have forced the health system to implement more drastic measures.

“We’ve had to make difficult decisions to maintain a strong financial footing in order to continue to provide high quality care to South Central Missouri and Northern Arkansas,” he added.

The health care system employs about 1,300 people.