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Hospital starts cutting positions

More than two dozen positions at Sierra Nevada Memorial Hospital will either be eliminated or be subject to a reduction in hours today, as the 121-bed medical facility looks to stem a multimillion dollar budget shortfall.

The changes affect 22 employees, including five full-time and three part-time positions that are being eliminated and 14 employees that will have their hours cut, hospital spokesman Gary Cooke said. Four open positions will not be filled, he added.

The layoffs occur in each of the hospital’s 18 different departments, though none of the positions being reduced or eliminated relate to patient care, Cooke said.



The hospital staff changes come at a time when the hospital is projecting a shortfall in its revenue goals, Cooke and other hospital officials said Tuesday.

Based on current revenues, the hospital projected an operating margin for its 2003 fiscal year ending June 30 of $4.7 million. At the moment, the hospital’s operating margin stands at $1.7 million, a pace that could leave the hospital facing a $2.9 million budget shortfall by the end of the year.




The workforce reduction alone will save the hospital $375,000 and each of the hospital’s six divisions are being asked to take a .5 percent cut in expenses, saving an additional $280,000. That still leaves the hospital about $200,000 short, Cooke said, even after additional cost-cutting measures.

Cooke and SNMH board president Michael Castorino said the combination of increases in labor costs and a decrease in the number of inpatients led to the revenue shortfall. Curiously, the dearth of people receiving treatment for traditional wintertime ailments, such as the flu, have also contributed to the decrease in revenue, the board president said.

“Our mix of patients is more the reason for layoffs than anything else,” Castorino said. “Our expenses are fixed but our revenues aren’t.”

It’s been at least a decade since layoffs were last announced by the hospital, Castorino and Cooke said, and about that long since the hospital incurred a similar level of budget shortcomings.

Departments were notified last month that layoffs were possible. Informational forums regarding the hospital’s financial status were held Monday and Tuesday for hospital staffs.

Sierra Nevada Memorial Hospital is part of Catholic Healthcare West, a San Francisco-based chain of 42 hospitals in California, Arizona and Nevada. The decision to make the changes in staff occurred at the local level and not from the top down, CHW spokesman Mark Klein said. The hospital chain generated $4.8 billion in revenue, according to the chain’s 2001 annual report.

Cooke said laid-off staff will receive severance packages, depending on their length of service.

Several employees contacted by The Union declined to comment on today’s actions.

Tom Collier, the hospital’s president and chief executive officer, said the decision to reduce the hospital’s workforce was a difficult one.

“If it were a short-term issue, we probably could ride it out. But hospital revenue is not going to improve given the state of the economy both statewide and nationally. To be in a position to provide the community with needed technology and pay increasing costs for labor and benefits, the expense of operation must be addressed.”

Today’s actions are necessary, Cooke said, in part to preserve the hospital’s long-term planning strategy, including a 10-year, $80 million plan to build a new patient wing, emergency room and new imaging center.

“This is not something we take lightly. It is not temporary, and it is something we’ll have to deal with for a while.”


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