Why was this reduction in force necessary? Natchez Regional Medical Center cannot currently generate sufficient cash from operations to meet its obligations as they become due. Our labor costs, including professional fees, account for over 70% of the hospital’s discretionary spending. Based on this factor and on productivity analyses that indicate that the hospital has more than 80 full time equivalent staff in excess of what should be required for a high performing institution with comparable facilities and patient volumes, the reduction was necessary to close the gap on the approximate $3 million the hospital is losing annually. Who made the decisions and how were they made? Productivity analyses were followed based on top performing hospitals with comparable facilities and patient volumes. Once these analyses identified that we had in excess of 80 full time equivalent staff, the Leadership Group, appointed by CEO Scott Phillips, began meeting and discussing in detail the positions that needed to be eliminated. The policy statement of Lay-Offs detailed in the Employee Handbook was used to guide the deliberations of the group. This policy states: “Lay-Off: This term refers to the termination of employment by the hospital because of lack of work. It is the intent of Natchez Regional Medical Center to provide steady employment. However, if changing circumstances cause lay-offs to be necessary, they will be made on the basis of the needs of the hospital. Persons with good work records will be eligible for recall. Lay-off and subsequent recall, insofar as possible, will be based on seniority according to work station.” This reduction involved staff and management at all levels, and every attempt was made to ensure objectivity and sensitivity, as well as compliance with all laws and regulations. As with any reduction, the hospital will most likely recall some of the employees involved in the lay-off. If employees retire, relocate or resign; every effort will be made to call back employees involved in the reduction in force. These recalls, as with the reduction, will be based on seniority and qualifications. The right to recall will expire 180 days following the employees’ termination date. How are eliminating these positions and salaries going to save NRMC or even make a difference? A goal by the CEO and Board of Trustees has been set to increase annualized net profit from operations by $5 million. The combined impact of the necessary expense reductions and revenue increases needed to accomplish the $5 million goal will be to reverse the hospital’s current approximate $3 million annual loss from operations and provide a sustainable cash flow. The Reduction in Force, factoring in salaries and benefits, will result in a total gross cost savings of approximately $4 million. Our community, and the nation as a whole, is concerned with affordable healthcare and being able to provide this healthcare for everyone. For Natchez Regional to remain a part of this affordable healthcare system, the market demands we manage our costs and continuously focus on productivity improvements. NRMC will not be cutting back on services; we will be dramatically improving how we deliver these services utilizing fewer resources. Did the hiring of all these physicians and their practices, as well as the costs associated with companies managing the hospital, get NRMC in the shape it’s in? Is anything being done about these expenses? Essentially all of the existing non-hospital business ventures operating on the campus or by the hospital are unprofitable. Through the planned restructuring of the hospital these contracts will be renegotiated or modified into profitable mutually beneficial business relationships. Through the planned restructuring and sale of the hospital, NRMC should be able to recapitalize the existing joint ventures on the hospital campus into a successful master hospital/physician joint venture, thus increasing our revenues and lowering costs to the community. The management fees, attorneys’ fees and other fees associated with the restructuring, bankruptcy and potential sale of the hospital are collectively called “case costs”. These case costs will be funded through interim financing and are not included in the hospital’s operating budget. In other words, these costs are a separate item and are funded separately. They are, however, necessary costs associated with getting the hospital converted to a private, cost effective provider. I heard the hospital is restoring the 5% across the board salary reduction and giving raises to some employees, but yet you are laying employees off. Is this true? Yes. The 5% reduction in wages has impaired our ability to attract and retain qualified staff. It will be restored prospectively effective June 1. The hospital will also be making salary adjustments to ensure that we can compete in a very competitive environment. Several upward adjustments will also be made for those employees and managers who will be taking on additional responsibilities. Finally, after the 5% reduction has been restored, any associate whose hourly rate is below $8.00 will have his or her rate adjusted up to $8.00 per hour. __________________________