HealthEast, a five-hospital system based in St. Paul, Minn., plans to convert one of its hospitals to provide long-term care and lay off 7% of its work force in a systemwide reorganization.
System executives cited coming state and federal healthcare reform along with consolidation and competition in the market as reasons for the changes.
Pending state approval, HealthEast plans to transfer 138 nursing home beds to Divine Redeemer Memorial Hospital in South St. Paul from Bethesda Lutheran Care Center in St. Paul by the end of the year, executives said.
The conversion cost is estimated at $2.2 million. Upgrading the Bethesda nursing home would cost an estimated $8.5 million, said Roger Green, HealthEast's vice president of planning.
If the state approves the conversion, acute-care services at 91-bed Divine Redeemer will be eliminated and transferred to HealthEast's other hospitals in March.
The reorganization, which will eliminate 250 to 300 full-time equivalent positions, will save HealthEast $18 million to $20 million a year in operating costs, Mr. Green said.
HealthEast also is negotiating to purchase land in southeastern St. Paul to construct an ambulatory-care center that will serve the same patients as Divine Redeemer, Mr. Green said.
HealthEast reported net operating income of $7.1 million on net patient revenue of $279.9 million in 1992, according to MODERN HEALTHCARE's Multi-unit Providers Survey (May 24, 1993, p. 49).