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As workers lose jobs, Shelbyville hospital loses money

November 17, 2008
Lumps taken by the housing and auto industries are taking their toll on Shelby County.

And one way to see it is to look at patients flowing into Major Hospital in Shelbyville.

Layoffs by Shelby County's auto-parts companies — such as the 40 let go in August by PK USA — have reduced the number of patients paying with employer-sponsored health insurance, said Major's interim CEO Jack Horner. So have reductions at construction companies or manufacturers that make housing products, such as Knauf Insulation. It furloughed 120 workers in 2007 because of the housing downturn.

Combined, manufacturing and construction make up 45 percent of Shelby County's work force, according to the Shelby County Development Corp.'s Web site.

From April through October, commercially insured patients spent 1.3 percent less compared with the same period last year, according to Horner.

That drop-off has shaved 1.5 percentage points off Major's operating margin because the hospital derives most of its profits from commercial insurance.

Asked if Major has any job-cutting plans, Horner paused and then said, "We're not planning any cutbacks right now."
 

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