Blue Mountain Health System is cutting back in an effort to meet the challenges of the Affordable Care Act.

Andrew Harris, president/CEO of Blue Mountain Health System, said that over the past year, Blue Mountain has seen an 11 percent drop in inpatient utilization.That compares to 15 percent nationally, but is still a challenge, Harris told members of the Palmerton Area Chamber of Commerce recently."With that, we've seen an increase in outpatient services," Harris said. "More patients are using outpatient services rather than inpatient, which creates the need for more primary care."In 2013, BMHS had a total of 5,144 admissions, 448 less than the 5,592 it had in 2012, which represents an 8 percent decrease, according to Lisa Johnson, vice president of Public Relations & Marketing.Due to the drop-off in inpatient utilization, Harris said Blue Mountain's revenues are down. As a result, he said it's had to reduce its expenses, which it hopes is a temporary experience."We've had some minor layoffs; there's been vacant positions we haven't filled," he said. "We reforecasted our budget by $1 million so that we can break even this year."Things are tighter now," he said. "We're barely breaking even; sometimes we're not."Johnson said that in 2013, BMHS had 850 full-time employees, 82 fewer than the 932 it had in 2012."The difference represents 15 retirements, of which 14 positions were not filled; 13 through attrition; 10 reduction of hours from full-time to part-time; and 32 reduction in force, which includes 16 from the switch to a primary care model of nursing," Johnson said. "It also includes 10 physicians who no longer work within our health system."Harris said the Affordable Care Act has impacted inpatient stays."The government is continuing to tighten down on admissions," he said. "Admissions have been reduced by government regulations, the length of stay has been reduced by government regulations, and reimbursement has been reduced by government regulations."Additionally, Harris said that the government cut Medicare reimbursement by 1 percent nationally in April 2013, which translates to a loss of about $1 million a year to Blue Mountain.Harris noted that Blue Mountain has received many awards from the state and federal level for its high quality services, and was recognized as being the lowest cost provider in the region, Harris said.In addition, he said that Blue Mountain is currently affiliated with Lehigh Valley Health Network."Blue Mountain Health System is a high quality organization that provides good primary care," he said."The position that our board has taken is that Blue Mountain needs to continue as an independent, high-quality, low cost provider that affiliates with other organizations to provide new services in our service area, and prepare for health care reform through our affiliations."Harris told the chamber it's important for Blue Mountain and the communities it serves to maintain that synergy."Hospitals are here to stay," he said. "As a partner, we need to continue to work together."Chamber President Peter Kern, who served as president and CEO of Palmerton Hospital from 1988-2000, shared his perspective."What's happening today in health care is exciting," Kern said. "Technological advances have made major improvements in the delivery of health care."For instance, Kern said, surgical procedures which once required a lengthy hospital stay are now being done on a same-day basis."It is difficult to predict what the future will bring," he said. "But, I am confident that the advances I've observed over the past two decades will be continued in the years ahead."Martin Ciccocioppo, vice president of Research, The Hospital & Healthsystem Association of Pennsylvania, said there has been a continuing trend away from inpatient to outpatient services.Ciccocioppo said the trend was precipitated by the recession of 2008, along with the success of the Hospital Engagement Network, on both a state and nationwide basis, with a reduction in readmissions after an inpatient stay and complications during the stay."It's been a combination of both," Ciccocioppo said. "The continuing effect of the recession, but also the benefit of improved quality health care coordination being done by the hospital sector, is reducing the need for patient care."