Oneida, TN (2018-06-05) In what was described as a strategic business move to better position the facility to meet its long-term sustainability, Big South Fork Medical Center has announced it will lay off 20 of its current 135 employees.
In a press release Tuesday afternoon, Rennova Health announced its intentions to reduce staffing at Big South Fork Medical Center by nearly 15%, as the facility begins transitioning from its start-up phase to a long-range sustainable business model. The company said the staff reduction was the result of a recent evaluation of the facility’s cost structure based on its current level of business, and its future business development options and synergies for the long-term sustainability of the hospital.
“As we exit our start-up phase and approach our first anniversary in August, it has become necessary for the hospital to readjust its staffing levels in accordance with our current (patient) census,” officials said in the release. Since it opened last August, hospital officials said staffing had been higher than necessary. “We have taken a cautious approach to staffing levels throughout our startup phase,” the release said. The hospital claimed staffing levels had been artificially high out of an abundance of caution to provide enough manpower to set-up the system and provide the necessary level of care. “This decision has not been without the utmost consideration to all parties involved, not the least of which is our customers, staff, and families,” the release said.
Prior to the announcement, the hospital was directly employing 135 people. In addition, the company had other contracted employees and professionals on site. The company’s current plans will affect approximately 20 employees. The company didn’t say whether those impacted were administrative, medical, or support staff.
The announcement to reduce staffing at the local facility came just days following the company’s completion of the acquisition of Jamestown Regional Hospital in Jamestown, TN. The company says the acquisition offers opportunities for the two facilities to work together to offer additional services to the community.
Tuesday’s memo to the press was intended to stave off the anticipated backlash from terminated employees and the general public. “We appreciate that reduction in staff causes concerns and raises questions and we wanted to ensure that (the press) had accurate information at hand from the company on our reasons for these steps,” officials said.
The company has financially struggled in 2018, as shares of Rennova Health stock have consistently traded for less than 0.01 per share in recent months. In May, the company filed a petition with the Security and Exchange Commission (SEC) requesting additional time to file its first quarter earnings report. The company says that the transition from diagnostic testing to the owner of rural hospitals has changed its financial reporting requirements and placed a burden on its financial team. It also cited the ongoing acquisition of Jamestown Hospital for the delay. The company, which also filed its fourth quarter 2017 earnings report late, says it has taken steps to resolve the issue.
In spite of Tuesday’s announcement, Rennova Health asserted its commitment to the community. “Rennova Health and Big South Fork Medical Center are committed to the citizens of the communities we serve for the long term, and we look forward to sharing more positive actions…in the coming months as we invest in and provide additional services from the hospital,” the statement read.