Bay Area Hospital in Coos Bay, Ore., plans to exit the home health market and transition services to other providers in the area by Aug. 17.
Medicare reimbursement rates failing to keep pace with inflation for home health services was a major factor in the decision, according to the hospital. Cutting this service, along with other operational staffing adjustments, will affect 33 of its 1,084 employees.
"Like many healthcare providers in Oregon, we are experiencing tremendous financial strain caused by several factors," Brian Moore, President and CEO, said in a June 15 news release. "As a result, we have taken steps to improve efficiency and effectiveness, and reduce costs."
The hospital, which ended fiscal year 2023 with a $60 million loss, attributed the service cut to various factors, including the high cost of temporary labor, increased operational and supply expenses and falling insurance reimbursements.
Over the last six months, Bay Area Hospital's turnaround plan has helped reduce operating losses by almost $40 million annually.
"We have successfully implemented a large portion of our turnaround plan and have set the course to ensure we will be here into the future," Mr. Moore said. "During this turnaround, we have made important investments in our employees, and we feel confident that we will work through the remaining improvements necessary to return to sustainable financial performance."