With the national economy continuing to dwindle, Twin Lakes Regional Medical Center has been forced to take drastic measures, in an effort to stay operational during hard times.

Twin Lakes CEO Stephen Meredith said the hospital is going to initiate several cost-cutting measures to deal with the economic issues facing the hospital.

Up to 10 percent in salary reductions have been made for hospital administrators, hospital employees must now use one day of vacation every two weeks, and a hiring freeze has been implemented. The hospital workforce has been reduced by one percent, purchases have now been limited to necessary patient-care items. The hospital’s expansion project, initially planned to begin later this year, has now been delayed for an indefinite period of time.

“In less than six months time, we have gone from a very stable financial position to one that is very difficult,” Meredith said on Monday. “We’re having to do a lot of belt-tightening.”

He felt there were several reasons that attributed to the hospital’s troubles.

“Along with the economic problems on local, state and national levels, we are feeling the effects of decreasing patient utilization, increasing charity care and increasing bad debts,” Meredith mentioned. “As more area employers either eliminate health insurance for their employees or significantly raise the deductible employees pay, our economic problems become worse.”

Various officials reacted to the recent announcement by Meredith.

Leitchfield Mayor William Thomason hopes the hard times will end soon, because he knows of several people on a personal basis who have been affected.

“I know of a good friend of mine that lost his job after 29 years,” Thomason explained. “He lacked one year of being able to retire. It is a hard time for everyone right now. The sad thing is that it does not look like this is going to change for sometime.”

Clarkson Mayor Bonnie Henderson was shocked to hear about the hospital cutting back.

“I really hate to hear the news,” Henderson said, “but I think it is better to cut back this way instead of people actually losing their jobs.”

Caneyville Mayor James Paul and Grayson County Judge-Executive Gary Logsdon were unavailable for comment.

According to Twin Lakes Director of Planning and Marketing Bill Oldham, the hospital is one of the largest health care providers within a six county area.

A drastic rise in unemployment levels in Grayson, and surrounding counties has taken a toll on the hospital’s bottom line.

“As the recession deepens and employers shed workers,” Oldham explained, “many of the individuals and families who have lost their health benefits are showing up at Twin Lakes for free care.”

Twin Lakes Chief Financial Officer Scott Arndell explained there has been a 25-percent increase in patient numbers without any form of health coverage during the last 12 months.

The loss of two primary care physicians during 2008 was also listed as a contributing to the current decline of the hospital.

“Losing the referrals from the practices affected us,” said Meredith. “We certainly are not blaming our problems on the physicians who left. It was a great opportunity for them. The difficulty is getting new physicians to re-locate here. It can take 18 months or longer to recruit and establish a physician before they can even begin building their practice.”

The ice storm, which hit Grayson County in late January, is cited as another contributing factor for the cutbacks. There were many unexpected costs while seeing a significant decrease in utilization during that time, making the pre-existing problems with the hospital worse.

“Most rural hospitals in Kentucky had to convert to critical access status to ensure their economic survival,” noted Meredith. “We are too large to take advantage of the enhanced Medicare reimbursement which can be derived from converting to a critical access hospital (CAH) but too small to realize the economies of scale of larger hospitals.”

In order for a hospital to be designated by The Centers for Medicare and Medicaid Services as a CAH, among other criteria they must maintain no more than 25 inpatient beds and maintain an annual average length of stay of only 96 hours per patient for acute inpatient care.

“We’ve been through tough times before and come out stronger in the end,” said Meredith. “The next several months are going to be very difficult. We will probably have to make more hard decisions, but our employees have the spirit and determination to pull us through.”