By Sharon Salyer Herald Writer
MONROE — Valley General Hospital is cutting 12 jobs and considering other steps to cut costs.
The job cuts, announced Wednesday, represent about 2.3 percent of its work force of 506 full- and part-time employees. The move follows losses over the past three years of $4.7 million, said Mike Liepman, the hospital’s chief executive.
Overall, losses last year totaled about $2 million, he said. Part of that was caused by a drop in hospital revenues of $3.8 million below what was budgeted.
Five of the 12 people being laid off are administrators or managers, Liepman said. The layoffs were effective on Wednesday. They will be given severance pay equal to three months of salary, he said.
The remaining seven jobs are scattered throughout the hospital, in positions such as housekeeping, food services and the business office, he said. Union contracts spell out severance benefits for many of these employees.
These and other cost-cutting steps are expected to save the hospital $1.2 million this year, Liepman said.
Valley General, like hospitals across the state, is caught in an economic squeeze caused by the recession. People are losing health insurance benefits as businesses trim costs. Hospital revenues decline because of the resulting drop in patients and increases in the number of uninsured patients stemming from unemployment.
The hospital will review other steps it can take to cut costs, Liepman said. These include reducing overtime, seeing if patients who can’t pay their bills are eligible for any government programs to pay some costs, and reviewing existing contracts and insurance plans for cost savings or increased revenues.
These steps could add up to about $3 million in revenue for the hospital this year, he said. The hospital expects $100 million in revenues this year.
Valley General Hospital has 506 employees. As full-time equivalents, it equals 360 positions, Liepman said.
Next year, the hospital may ask voters to approve a property tax increase to help pay for improvements in technology, and eventually, he said, a new hospital building. The current operating levy is 8.8 cents per $1,000 of assessed valuation, which brings in $1.3 million.
If the levy rate was increased to 33 cents per $1,000 of assessed valuation, it would generate $5.2 million.
“That would put us in good shape,” Liepman said.
The average levy rate for public hospital districts in Washington is 68 cents per $1,000 of assessed valuation, he said.
The layoffs at Monroe’s hospital reflect a statewide trend over the past 18 months of hospitals making cuts because of the recession, said Jeff Mero, executive director of the Association of Washington Public Hospital Districts.
“There have been a lot of public hospital districts that have had to lay off staff, eliminate services, slow planned growth of services and suspend construction projects,” he said.
Hospitals have been hurt in two ways by the economy, Mero said.
Patients are putting off treatment, so patient volumes, and the income they bring in, have declined at hospitals across the state.
And as people who were laid off lose health-care benefits, they increasingly turn to hospital emergency rooms to get care because federal law orders hospitals to treat uninsured patients.
This means hospitals are losing even more money on charity care and others who don’t pay their medical bills, he said.
“It’s putting tremendous strain on many of our smaller hospitals,” Mero said.
Sharon Salyer: 425-339-3486, firstname.lastname@example.org.