Healdsburg District Hospital cuts 30 employees

Layoffs total eight percent of the workforce
Looking to bring overall expenses more in-line with both short term and anticipated longer term revenues, the North Sonoma County Healthcare District leadership last week cut its workforce by eight percent, putting 30 employees out of work.
The staffing cuts are said to be the first ever in the district’s 10-year history as a community-owned hospital district. Similar cuts have been made or will be made soon at other Sonoma County hospitals, including Sutter Medical, Santa Rosa Memorial and Sebastopol’s Palm Drive Hospital.
The Healdsburg hospital layoffs were “across the board” and affected almost all departments and management, direct-care and support levels, said CEO Nancy Schmid.
“These changes are being made to ensure the long-term strength of our hospital and our ability to serve this community,” said Schmid, who took over her CEO role in July. “Quality care for our patients remains our highest priority.”
E.J. Neil, chair of the hospital district’s board of directors said, “obviously we’re under great financial strain but we’ve been here before and we’re not going away. We have a job to do and we’re going to continue to do it.”
Neil called the staffing cuts a “realignment,” where staffing levels in many departments had increased over recent years while other costs increased but patient visits did not.
“Insurance companies are just unwilling to pay for patient stays anymore,” said Neil, about the sagging levels of patient days and payments. “Compared to other hospitals, we had to combine jobs and get more efficient.”
The hospital district now has 330 employees, staffing a 21-bed acute care hospital with emergency department, laboratory services, women’s health clinic, wound care center and a stand-alone primary care facility.
Hospital finances have continued to be challenging since the district’s inception in 2002. In a recent mid-year budget review, the board of directors were told there was a $2.9 million shortfall in anticipated revenues for the year, resulting in a $1.27 million operating deficit.
Besides out-of-balance staffing levels, the hospital is going through a very expensive process of converting to mandatory Electronic Medical Records (EMR). The system is required to be in place next fall at a cost of $4.5 million, partially paid with a federal grant.
“This has been a very thorough process (of looking for cost savings and better efficiencies),” said Schmid. “We’ve spent months in department-level meetings with manager evaluations. We looked at our expenses everywhere. This is a first step and we are still looking.”
Big changes are being anticipated at all of the nation’s big and small hospitals when the federal Affordable Care Act (Obamacare) goes into full effect in 2014. The big problem is no one knows what those changes will be.
“We know we have to have a more stable long term financial picture,” said Schmid, “but no one can answer definitively what the Affordable Care Act will do to us and how our private insurance companies will react.”
Neil said the private insurance companies are “driving the process. They want the business and they want the money but they will have new standards to meet. Some of their policies won’t comply. Actually some of the existing patient plans are pretty creepy. They’re not going to make the cut.”
For Schmid she thinks the best approach is working on a “Medicare model” where the hospital aligns itself to give the best possible patient care on the fixed dollars they will be reimbursed.
Healdsburg District Hospital is in the second year of a four-year strategic plan to ensure economic viability, install electronic records, recruit and better train staff and create a culture of “perfect care.” Part of that initiative includes increasing preventive care and wellness programs for the community.
Healdsburg District Hospital serves almost 60,000 people in Cloverdale, Geyserville, Healdsburg and Windsor and the surrounding rural areas. Property owners pay an annual $150 per parcel tax to the healthcare district.
“We have always provided excellent patient care,” said Neil, “and we’re not going to quit doing that.” He said more cost savings measures are still being considered but “cutting quality” is not one of them.
Department-level staff meetings were held at the hospital last week to announce the job cuts. Schmid and Neil said some of the employees who were laid off had been with the hospital for several years.
“We are hopeful this is the only time we will have to do this because it’s never easy. However, we will continue to re-evaluate in the coming months,” said Schmid in a prepared press release.
“We know the lives of many people have been affected by our decisions, and we made it a priority to treat all employees with kindness and respect.”