VALDOSTA -- "Let me reiterate -- we are not having a layoff," said James McGahee, chief executive officer of South Georgia Medical Center, addressing the Hospital Authority of Valdosta-Lowndes County Wednesday at a board meeting.

McGahee said the hospital is fortunate to be in the position to not have any layoffs at this time. Over the next year, SGMC plans to eliminate 100 full-time equivalent positions through attrition and the reduction of overtime hours.

The hospital is finalizing its budget for the next fiscal year beginning Oct. 1. Chief Financial Officer Greg Hembree said the hospital is faced with budget constraints as the number of patients isn't increasing, reimbursements are down, there is a nursing shortage, and the number of indigent patients without health insurance is rising.

"There is a delicate balance we had to strike," he said, stating that the finance committee is recommending a rate hike of 6 percent, which would give them a 2 percent operating margin. McGahee said the rate hike wouldn't affect most payors as the majority of patients are covered under Medicare, Medicaid, Tricare or similar plans which have caps on prices.

McGahee acknowledged that some changes in the employees' benefit packages have been made. The proposed changes were presented to the department managers on Wednesday and will be presented in small group meetings with the employees over the next week.

McGahee also acknowledged a great many employee rumors have been circulating, and said they hope to dispel them through the meetings. As an example, he said a number of employees thought the dental plan was going to be eliminated, but that's not the case. He said the most significant benefit changes were in PTOs, or paid time off. Rather than getting a separate bank of sick days and vacation days, employees will be able to pool their days off and take them for any reason and will also be able to sell back any unused days at the end of the year.

"A large number of our employees will think it's beneficial. They can choose their sick and vacation times," he said, adding that the bulk of the changes in benefits will affect future employees more than current employees.

Hembree said there was also room in the budget for 2 to 4 percent merit pay increases next year, which will be tied to employee evaluations.

When questioned by board member Lynne Feldman, Hembree stated that there are services currently under review for possible elimination, but no decisions had been made. Those services include the hours of operation for convenient care, the courtesy transport, and the pediatric phone triage service.

McGahee also stated that there were some concerns expressed by staff about the hospital pursuing capital projects at a time when they are facing budget problems. He said a number of capital projects have been put on hold indefinitely, and defended those the hospital decided to continue with at this time, including the coffee corner.

"Our snack bar is serving 1,800 employees and several hundred visitors every day and it wasn't built for that. Our cafeteria was built in 1983, and we have two and a half times the size of employees than we had then. We need an alternative for seated food service," he said.

The food court will have seating for 60 inside and 40 outside. "The food court will make money and pay for itself," said McGahee. The cost of the project is $1.2 million.

He said the administrative offices being added to the project are justified due to the fact that they are in the same area as the food court and it would be too expensive to do them as separate projects. One of the offices will be for Ken Kiser, the nursing director, who is using a patient room for an office.

"There is sensitivity to capital projects at a time when we're reducing operating costs, but there are some things you have to do," McGahee said.

Authority Chairman Bill Cowart said, "We've been involved with this budget more than in the previous years. We know the employees are very concerned and our primary concern is patient care, and without great employees, you don't get good patient care. The administration has looked at every angle."

Cowart added that the administration and board hoped to dispel the rumors when meeting with the employees face to face over the next several days. "We're doing the best we can for our patients and our employees," he said.

To contact Business Editor Kay Harris, please call 244-3400, ext. 280.

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