ELKHART -- Elkhart's hospital is feeling the effects of a downtrodden economy and 18 percent unemployment here.
Elkhart General Hospital officials announced salary cuts Wednesday, effective immediately for all employees. General staff will see a 4 percent cut, while executives will see an 8 percent cut.
"A lot of times hospitals can tend to weather economic storms pretty effectively," said hospital President Gregory Lintjer. "Usually they don't come in a barrage like we've experienced in the United States and Elkhart County."
The wage and salary reductions will save the hospital $2.4 million this year, or the equivalent of 88 jobs, according to a press release sent by the hospital.
Asked if EGH would be experiencing any layoffs, Lintjer said, "There may be a couple of positions that may get moved around, but nothing of a major nature."
The hospital employs about 2,300 people.
"We felt that this was the most sensitive and fairest option that would impact people the least," Lintjer said. "I don't want to diminish the impact this would have on wage earners, but other options ... might have a broader impact in a community with 18 percent unemployment."
A rise in Elkhart County's unemployment has caused the subsequent loss of employer-sponsored health insurance and increases in bad debt and charity care.
The hospital's budget shortfall and the decision to reduce salaries was the result of factors including high patient volumes with an increasing number of uninsured patients, payments from Medicare and Medicaid not keeping pace with expenses and patients with high-deductible health plans not being able to pay those increased deductibles, according to the release.
In addition, people are delaying care and are sicker when they finally come to the hospital, Lintjer said.
"It's created a situation where we have sicker people creating larger bills that, in some cases, we're getting underimbursed for or in some cases, the patients aren't able to pay for the care they're receiving," he said.
Lintjer said hospital officials have been talking with vendors and contracted companies to find a way to reduce costs. He said the salary reductions would not impact on the quality of EGH's patient care.
Officials from Goshen General Hospital declined to comment on any cost-reducing measures under way there.