INDIAN RIVER COUNTY — The chief operating officer of Indian River Medical Center has resigned from her post in what hospital management describes as a “collaborative decision” to cut costs.
The hospital has been experiencing a drop-in admissions and reduced Medicare payments.
Cindy Vanek, who also serves as the hospital’s vice president, resigned in July and will stay on until the end of August. Vanek, a longtime registered nurse at the hospital, has been in the COO position for more than five years.
Chief Financial Officer Dan Janicak will assume the COO post while continuing in his current position, which he has held since January 2011. His dual roles are expected to continue for the foreseeable future, according to Dr. Hugh McCrystal, a member of the Hospital District board until he resigned a year ago.
The reasoning behind the dual job for Janicak is that a CFO who is also head of operations will carefully control operating expenses, which include salaries.
“He’s very good in finance and we need to get our financial picture straightened out,” said McCrystal.
McCrystal said the hospital is running at a deficit and needs to turn that around.
“Admissions are down and surgeries are down as they are nationally,” he said. As a result, management has to adjust downward budgets for everything from supplies to staff.
To make things worse, until three years ago, the hospital received a 3 percent annual increase in reimbursements from Medicare. But that increase has since been frozen, despite rising costs of salaries, medications and supplies.
Further, a drop of 3 to 6 percent in admissions and surgeries for fiscal year 2013 means the hospital is looking at a loss in operating money. In 2014 that loss is expected to be “more dire,” said a source in a key position to know – as much as $3 million or $4 million.
Meanwhile, capital funds for medical center construction, equipment and real estate, are growing by leaps and bounds. The hospital foundation has raised $30 million in pledged capital funds for a new cancer center and the pledged funds are expected to increase to $48 million in the next two years.
Some of it could create an endowed chair in oncology, which would save on a salary – an operating expense. But a good percentage of the money is expected to go for the construction of an out-patient cancer center, renovation of in-patient wings for cancer patients and for the renovation of operating rooms.
Meanwhile, the existing hospital continues to struggle financially.
Capital funds have recently gone toward a new ambulatory wing, an MRI machine and equipment and space for chemotherapy infusions, as well as IV antibiotic infusions.
The growing concern among board members and medical staff was that the hospital was not addressing every day operations but was, instead, focusing on big-ticket tangibles.
“The disparity was producing anxiety,” said a second source.
The decision was made among board members and administrators – including Vanek and Janicak – to combine the jobs of chief operating officer and chief financial officer and fill the position with Janicak. The change was made, said the first source, so that more money would go for day-to-day operating costs.
Just one month ago, IRMC announced 21 layoffs and several dozen more positions that were being eliminated through attrition. The 355-bed hospital is down to 1,600 full- and part-time employees.