Latest round of hospital cuts reduces workforce by 60

The latest round of layoffs and curtailments in the Grays Harbor Community Hospital District have reduced the workforce by the equivalent of nearly 60 full-time positions, the hospital said Thursday. Some — 33 — have been laid off or left the district completely. Others are working fewer hours and all told, the effect on the budget is 60 fewer employees as the hospital looks for solutions to stem a financial crisis.

Two weeks ago the hospital announced that 10 jobs in leadership positions had been cut. Last week 21 union positions at the hospital were cut, along with two from the Harbor Medical Group, a hospital subsidiary that operates several clinics around the county.

The latest numbers don’t include the 21 people laid off in January when the hospital outsourced its billing work, so altogether the reduction in force is around 80 positions this year.

The hospital lost more than $8 million last year and has net losses of more than $1.7 million in the first two months of this year. Its patient counts are significantly below what the hospital has budgeted for, and low compared to last year.

The financial picture was bleak in 2017 and the 2018 budget passed by the hospital district board anticipated cutbacks, but this goes much deeper. The budget called for reducing the workforce by the equivalent of 22.29 positions, from 647.54 full-time equivalent employees to 624.95.

The latest layoffs have been guided by recommendations from Navigant, a large, national consulting firm that began working with the hospital six weeks ago. It has expertise in the medical field and has been hired to steer the hospital through its problems, looking for ways to cut costs and increase revenue. Hospital spokeswoman Nancee Long said hospital officials and staff have had hundreds of meetings with Navigant, which has had multiple consultants on site every day.

In many cases, Long said, Navigant’s role has been to show hospital officials how other hospitals around the country are handling the same functions and hospital volumes, but with fewer employees.

Some employees who were full time are now part time and some part timers had their hours reduced. Long said in many cases employees volunteered to have their hours reduced in order to save jobs in their departments.

Target goals suggested by the consultants are expected to result in about $14 million in an annual net improvement, Long said.

Those include:

• $5.5 million savings from personnel cuts

• $3.2 million in higher collections due to changes in the billing operation, which was outsourced earlier this year.

• $1.6 million in savings for supplies, brought about by changes in buying strategies suggested by the consultants

• $3.8 million in savings due to efficiency in moving patients through the system, reducing patient time in an observation status by either admitting them sooner or sending them home.

In addition, the recently passed state budget grants the hospital higher reimbursement rates on bills for Medicaid patients, and the federal government is expected to grant the hospital a status that would pay higher rates for Medicaid patients treated at the hospital’s clinics.

A hospital news release says 13 consultants have had at least 200 consultations with people in 38 departments. Long said the process has been collaborative and often emotional as longtime employees are affected.

In many cases, employees have taken early retirements or voluntary furloughs so that people can keep their jobs, she said.

“This is most definitely an all-hands-on-deck approach to financial viability,” the news release stated.

The new normal will mean many operational changes, she said, and the consultants are working with the different departments to demonstrate how the hospital should function with fewer workers. “They’re not just here to tell us how many people to cut,” she said. “Just reducing people isn’t going to do it alone.”