More Than 150 Covenant Employees Get Laid-Off - KCBD NewsChannel 11 Lubbock


More Than 150 Covenant Employees Get Laid-Off

We first told you almost two weeks ago that Covenant needed to cut its operations budget by $40 million. Effective Monday morning, Covenant Health System cut 159 administrative and support staff jobs. However, none of the layoffs are patient care workers.

The hospital attributes the layoffs mainly to a drop in Medicare reimbursement payments. Covenant says more than 50% of its revenue comes from the Medicare program.

Spokesman Eddie Owens says the medical center is losing $22 million a year in Medicare and Medicaid reimbursement payments, because of that, Covenant needed to cut back on expenditures. Two weeks ago, we reported 259 people may lose their job, but it turns out that number was 100 less.

Owens says Covenant budget planners are saving money by reducing overtime and using full time employees as much as they can. "We have been able to save the bulk of that amount to a manageable number. We were hoping we could get the entire $40 million without cutting personnel, but that just wasn't possible," said Owens Monday.

Covenant is paying those 159 employees at least four weeks severance pay. Owens says no more layoffs are expected this year.

One more note, Covenant says the new $10-million emergency room has nothing to do with the layoffs. Construction projects are paid for out of capital dollars from profits and this budget shortfall is a result of a decrease in day-to-day operational dollars.

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