Hospital downsizing announced
Tahoe Forest Hospital District announced the need to eliminate 24.5 full-time equivalencies in June – potentially threatening at least that many employees with layoffs. However, two months later all the changes are in place and it looks like only a few employees will be affected.
“The actual number of staff impacted was seven, in various ways,” Human Resources Director Jayne O’Flanagan said. “Seven employees have been notified that their positions have been eliminated.” She said other positions at the hospital are available for six of the seven.
“One of those we will not be able to find a position for at the hospital because of her licensure,” O’Flanagan said. “She has indicated that she will be going back to school for her master’s degree.”
O’Flanagan said most of the other employees will easily be accommodated within the hospital.
“Department heads have been innovative,” she said. “Most reductions were done by not filling vacant posi-
tions. The process has actually created three full-time positions.”
She said the hospital realizes substantial savings by consolidating part-time positions.
“Instead of two part-time positions receiving benefits, we have one full-time person receiving benefits,” she said. “Benefits make up about 42 percent of the payroll.”
She said minimal training will be required for the employees to move to other positions.
Hospital Administrator Larry Long said the driving force behind the reductions is to align the hospital’s expenses with its revenue flow. He said insurance companies, Medicare and Medi-Cal are all freezing payments or trying to pay less for medical care than they did the year before.
“All of them are demanding that we accept less payment for the same or more services provided,” Long said. “That sets the stage for our reduction of operating expenses. More than 50 percent of our operating expenses are staff-related.”
Long said the district examined regional benchmarks for cost per unit of service to determine where the hospital should be on that scale.
“We are comparable to or better than the typical hospital out there,” he said. At the same time, we wanted to be able to contract with community health plans out there while retaining our financial viability.”
He said the targeted decrease was a 4 percent reduction from last year’s budget, amounting to about $2 million in cuts. With inflationary pressures of 3 percent, Long said the $2 million cut is actually a 7 percent reduction from the 1997-98 budget of $32 million.
In addition to eliminating vacant positions, the district closed its durable medical equipment business and reduced the number of beds at the Incline Village Health Center.
“There was very little impact on scope of service,” Long said. “This efficiency is the result of the whole hospital searching out approaches which would not shrink away from providing top-notch service and quality care. Thanks to the employees for a job well done.”
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