Financial pressure forces cuts at St. Mary

Staff was reduced by 13 full-time positions, not quite two percent of the 783 full-time equivalent staff.

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WALLA WALLA - One of the area's longtime employers has been forced to reduce its number of full-time jobs.

Providence St. Mary Medical Center, the county's fourth-largest employer, told its staff this fall that the hospital's financial situation was growing worse.

According to an article in St. Mary's "Vital Signs" internal newsletter, published on Oct. 25, officials' concerns have been mounting regarding the financial performance of the "Region," noted Chief Executive Officer Steve Burdick.

"I remained hopeful that we could implement some austerity measures like not filling open jobs, a furlough plan and travel freeze to get us back to our budget. Unfortunately, our situation has gotten worse, not better, despite our best efforts," he told employees.

"We have done a very good job of managing our expenses this year, but it has not been enough to close the gap, and in August and September we have booked cumulative losses of over $400,000."

Burdick listed various reasons, including fewer people using inpatient and outpatient services and a dramatic increase in the numbers of under- or uninsured patients.

As of September, St. Mary had provided more than $8 million in charity care, but just over $4 million had been budgeted for the need.

The hospital CEO also mentioned "draconian" cuts to Medicaid programs since July.

"We anticipate more to come as the budget deficits increase with every new projection."

In a prepared statement to the Union-Bulletin, Burdick said more employers are dropping company health insurance and fewer people can afford to buy on their own.

The sum of those events necessitates an aggressive program of cost cutting with three components, Burdick wrote in Vital Signs.

At this time, St. Mary has reduced staff by 13 full-time positions, equaling not quite two percent of the medical center's 783 full-time equivalent staff.

"In most cases, the reductions have been through voluntary separations, where individuals could retire or leave Providence St. Mary in exchange for a severance package and bonus if their position did not have to be refilled," Burdick said in his press statement.

"A few more position reductions are possible, but that is unclear at this time. The medical center also is reorganizing management to a leaner structure, has combined some positions, and is not filling some vacant positions."

The decisions are "incredibly difficult," he told employees.

"We will rely on our Mission and Core Values to help guide us through these times. There will be every effort made to provide resources to those employees who are impacted, including outplacement and spiritual care ... And folks, our biggest solution to this puzzle is to grow our patient base, which is predicated on the excellent care and personal service that has been the hallmark of St. Mary for 131 years."

Staff reduction will not be noticeable to patients or impact patient care and the hospital - which is just one Northwest hospital facing this challenge - is still operating with a solid margin, Burdick said.

Sheila Hagar can be reached at sheilahagar@wwub.com or 526-8322.

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