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Southeast Alabama Medical Center (SAMC) announced today a $30 million strategic cost reduction plan that includes reducing its labor force by 80 employees.

Matt Boster

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Posted by: Matt Boster
Date: May 24 2017 5:25 PM

During the past four months, Southeast Alabama Medical Center (SAMC) has been engaged in a strategic cost reduction process, called Optimization. The structured process sought to harness the best ideas of employees, physicians and management to lower the cost structure of the organization by $30 million annually. Throughout the process, three main expense areas were evaluated closely, which included costs from supplies, purchased services and labor.


It led to an organizational restructuring that will reduce SAMC’s labor force by about 80 employees. Individuals affected, which includes positions at all levels, were notified this week.


“SAMC aspires to consistently perform at the highest level of clinical quality and patient satisfaction for our Alabama, Georgia and Florida patients and their families,” SAMC CEO Rick Sutton said.  “To accomplish this, we must be sound financially and at the same time be the healthcare organization of choice for employees and physicians. Unfortunately, an organizational restructuring was required to reposition SAMC for future success.”


Sutton said the number of bedside nurses caring for patients should not decrease due to this restructuring. However, decisions made, could increase the number of bedside nurses overall. Some supervisory nursing and support clinical roles were eliminated, and those nurses may decide to return to bedside placing more nurses back into direct patient care.


“The decision to reduce the workforce was not made hastily or haphazardly,” Sutton told employees.  “Hospitals nationwide, including many in Alabama, are struggling with reimbursement reductions, new regulations and reform uncertainties. We believe it was the right time to re-position ourselves to ensure that we’re building a sustainable future.”


The hospital decided to undergo a strategic cost reduction process because recent financial performance was not strong enough to sustain future growth and new investments in programs and services. After several years of declining financial performance from operations alone, SAMC ended the most recent fiscal year with a negative financial margin for the first time in almost 10 years.


“In making decisions on organizational changes, we considered the importance of maintaining facilities, safety and quality of care priorities,” said Sutton.



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