King's Daughters Medical Center, Ashland's largest employer, announced layoffs Tuesday and said it expects to cut significant numbers of staff in all areas of the hospital.
The hospital has changed employee benefits, renegotiated contracts and reorganized over the past two years, the hospital said in a news release, but its financial situation keeps getting worse.
"Unreimbursed care and bad debt are at an all-time high for our organization — approaching the $100 million mark this year, which is a 33 percent increase over just a year ago," spokesman Tom Dearing said in a statement.
The Service Employees International Union District 1199, which represents 672 service and maintenance workers at the hospital, was told that 82 of its employees would be let go, said Rob Johnson, hospital division director for the union. At least another 50 expect to go from full-time to part-time, Johnson said.
The union doesn't represent nurses or other medical staff at the hospital. Johnson said he knew that some non-union employees, including nurses, were being let go, but he wasn't told how many.
"KDMC claims that these layoffs are due to the economic recession facing the region, however, they are the wealthiest hospital system within hundreds of miles," Johnson said in a statement on his union's Web site. "The truth is that this is about placing profits before people. The folks who work at this hospital provide quality patient care for our community, and these layoffs could put that care at risk."
The hospital employs about 4,400, more than Marathon and AK Steel combined, said Jim Purgerson, president of the Ashland Alliance chamber of commerce. It's the biggest employer between Lexington and Charleston W.Va., he said.
Reorganizations might save some jobs, Dearing said, so numbers of employees affected would not be known "for some time."
But some employees had been let go as of Tuesday afternoon.
"This is probably the biggest hit we've taken since the recession," Purgerson said. "This is the first really big bump in the road we've had locally or regionally."
King's Daughters had been expanding. Purgerson said employment at the hospital has doubled in the past 10 to 12 years.
In 2006, King's Daughters completed a $65 million cardiovascular care center and last year announced a $22 million expansion of the center that is paid for and nearing completion, Dearing said. The hospital has reached across the Ohio River to build facilities in Ironton and Portsmouth, Ohio, and has clinics in Boyd, Greenup and Carter counties.
"Health care is what I call our economic engine to replace manufacturing," Purgerson said. "So even with the layoffs, they're going to be a substantial presence here."
According to tax forms filed in 2007, the latest financial records available to the Herald-Leader, the hospital's parent Ashland Hospital Corp. claimed a profit of $29.5 million. Its highest-paid employee, a physician, made more than $1 million a year in 2007, and President Fred Jackson made $785,575.
Johnson said management at the hospital has grown twice as fast as rank-and-file employment.
"I'm having trouble seeing where they're not making any money," Johnson said.