ARLINGTON – Cascade Valley Hospital has laid off 12 employees as part of a cost-cutting plan after reporting losses of $600,000 during the first five months of the year.
None of the staff cutbacks was in nursing or patient care, said Clark Jones, the hospital’s chief executive.
Job cuts were made in areas such as administration, marketing, medical records and admitting, he said. These staff reductions are expected to save the hospital about $60,000 a month.
In addition, Jones volunteered to take a $1,000-a-month cut in his salary through the end of the year. He is paid $166,000 a year.
The hospital took steps “to make sure we’re not in any financial difficulties,” Jones said. “We believe our profitability will improve by year’s end.”
The taxpayer-supported hospital, which also operates six clinics, ended last year with an operating surplus of $818,817, he said. The hospital has 430 employees.
Part of this year’s financial problems were caused by the reimbursements the hospital receives from Medicaid, Jones said. The state and federal program helps pay for health care for low-income patients.
The hospital is paid based on monthly Medicaid estimates of what is owed. “Periodically they look back to see if we’ve been reimbursed correctly,” he said.
Program officials determined that the hospital had been overpaid by $531,000 over the past year that must be refunded.
Even without this financial hit, the hospital would have had losses during the first half of the year, although they would have been minor, Jones said.
He predicted that the hospital’s finances will improve over the second half of the year. “For one thing, we won’t have this big deduction in Medicaid reimbursement,” he said.
In addition, the hospital has been able to fill some open registered nurse positions, replacing more expensive contract workers.
That will not only help save on expenses, but help the hospital serve more patients, he said.
During the first half of this year, the hospital’s nursing shortage sometimes caused the hospital to divert patients to other hospitals because of lack of staff, Jones said.
“The hospital business is very cyclical,” he said. “You do have periods of gains and losses throughout the year.”
The hospital and its medical clinics have an overall budget this year of $42 million. The last time the hospital lost money was 2001, Jones said.
The hospital faced serious financial issues in 1998 and 1999, when losses hit as much as $200,000 a month. Overall, loses totaled $1 million for each of those years.
“We’re financially secure,” Jones said of the hospital’s current trends. “When you have a period of losses, you take actions to make sure you don’t get into financial difficulty.”
Reporter Sharon Salyer: 425-339-3486 or salyer@heraldnet.com.
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