MetroHealth System in Cleveland is eliminating 300 to 400 full-time equivalents-up to 9% of its work force-because of a major funding cut from Cuyahoga County, Ohio.
But one MetroHealth official said the cuts could benefit the county-owned system in the long run.
The county is in a financial crisis as a result of the collapse last year of an investment fund-similar to the one that rocked Orange County, Calif.-from which it could take years to recover. The county lost $115 million-about one-third of its annual budget, or more than $200 per household.
MetroHealth's funding, meant to compensate for indigent care, was cut 56%, to $11.9 million this year from $26.8 million in 1994, said John Begala, MetroHealth senior vice president for planning and community affairs. The system's operating budget is $320 million.
At the same time, MetroHealth is trying to cut costs and utilization to move from fee-for-service to capitation. A Medicaid HMO program, OhioCare, is scheduled to start Jan. 1, 1996, and MetroHealth is the largest Medicaid provider in the state.
OhioCare is supposed to add to Medi-caid 500,000 people who are now uninsured. Begala said if that number holds, the new reimbursements will make up for 40% to 50% of the funding cut.
No program will be eliminated, Begala said, but layoffs affect all areas. Some specialists on the medical staff lost their jobs, which is unprecedented in the system, he said.
Begala said while the cuts are painful, "We'll be better prepared for a managed-care environment than most institutions in town when we're through with this."
MetroHealth includes 1,014-bed MetroHealth Medical Center and 172-bed MetroHealth Center for Rehabilitation. It is affiliated with Case Western Reserve University School of Medicine.