MetroHealth freezes hiring to head off $6M operating loss

Staring at the prospect of a $6 million operating loss for 2011, MetroHealth System has frozen hiring and implemented several other measures in the hopes of breaking even on the year.

The main reason for the projected loss is a 9 percent uptick in uninsured or under-insured patients, according to a statement from the publicly subsidized safety-net hospital.

Other factors hurting MetroHealth’s finances include: state cuts to Medicaid, a shift from inpatient to outpatient care and rising overhead costs for employees, pharmaceuticals and supplies.

“MetroHealth has been behind our budget goals all year and it’s clear that these trends are continuing,” CEO Mark Moran said. “Break-even operations like this are nothing new to MetroHealth and we will attack this situation aggressively.”

The specter of an operating loss would be a return to the bad old days for MetroHealth. Moran helped engineer an impressive financial turnaround for the hospital that led to three consecutive years in the black from 2008 to 2010. Metro lost about $2 million in 2007.

In addition to the hiring freeze, Moran outlined several other steps Metro would take to avert the $6 million loss in 2011:

• Reviewing admission criteria and challenging payors on reimbursement levels
• Reducing discretionary expenses that are not related to patient care, including consulting and travel
• Ensuring that patients are treated with the appropriate level of resources
• Developing new service locations to move more care to a stronger ambulatory network

The word that jumps out from that list is “consulting.” MetroHealth has come under intense, public-records-request-fueled pressure from The Plain Dealer for a series of no-bid consulting contracts to Moran’s former employer, as well as consulting payments to departing Metro employees.

Perhaps the reduction in consulting expenses will tamp down some of that furor, but it’s just as likely that more information uncovered through Freedom of Information Act requests from The Plain Dealer will lead to further headaches for Moran and crew.