Friday, May 28, 2010

Riverwood Healthcare announces cost reductions, strategic plans

In response to the difficult economic challenges hospitals are facing in today’s economic climate of slow growth and job cuts and many reimbursement reductions, Riverwood Healthcare Center in Aitkin is planning ahead by implementing measures to control costs while continuing to address the community’s medical needs.

With a trend in decreased patient volumes, an increasing number of patients unable to pay their bills and changes in healthcare reimbursement, Riverwood is experiencing a $4.2 million deficit in budgeted gross revenue for the first seven months of fiscal year 2010.

“Riverwood's management has done a nice job controlling costs to keep the deficit to a minimum, however our directors and our Governing Board of Directors have determined that we need to make additional changes now so we can continue to provide vital healthcare services to our community for the long term," explains Riverwood CEO Michael Hagen.

This week, Riverwood laid off 10 employees and reduced the hours for 17 others in order to realign staffing needs based on the current demands of the organization.

"This was a very difficult decision," Hagen states. "However, based on a current trend in decreased patient volumes, we needed to make some adjustments."

Riverwood is also reducing the current spending in supplies budgeted by 3 percent and limiting employee travel and education. In addition, the CEO and all five directors have taken a salary reduction.
While controlling costs, Riverwood is strategically planning for future medical needs of the communities it serves.

"We must keep looking ahead to meet the healthcare needs of our community and enhance high quality healthcare locally," Hagen adds. "In order to better serve our patients, we are expanding services in a few areas including orthopedics and oncology. We are also moving ahead with a building expansion project that will include a change from double-occupancy patient rooms to single-bed rooms. These changes are very important for quality of care and patient satisfaction."

"This is a time of change for healthcare systems. We are confident that by assessing our situation early we will be able to identify opportunities and to make better choices among tough options for maintaining top-level quality medical services for area residents long term."

Media contact: Arlene Wheaton, Riverwood Healthcare, (218) 927-5589, awheaton@sisunet.org