WILLMAR -- Seventeen people were laid off this week at Rice Memorial Hospital as the city-owned hospital struggles to stem a $2.1 million operating loss in 2006.
The hospital also will reduce hours for some employees and will leave some positions unfilled.
All told, hospital officials are cutting almost $2.3 million from this year's budget through a variety of measures that include reductions in supplies, travel, education and capital spending as well. The amount represents 4 percent of the hospital's $87 million annual budget.
The cost-cutting plan was reviewed in detail on Wednesday by the hospital board of directors.
Lorry Massa, the CEO of Rice Hospital, said officials had continued to hope that patient numbers would increase after lagging far behind projections through most of 2006.
ADVERTISEMENT
"Now I don't think we can justify waiting any longer," he said. "You can't count on it so you have to put measures like this in place."
The situation was outlined to the hospital's 700-some employees during a series of meetings earlier this month.
Employees who were being laid off were notified Monday.
The spending reduction plan was announced internally Monday and Tuesday and made public at the board meeting on Wednesday.
"Initially everybody knew it was coming and everybody is sad," Massa said. "We'll go through a number of phases in this. There'll be some anger. There'll be some finger-pointing and blame assessed, and that's natural. Hopefully we'll begin to move through that. If we have a number of things go right for us, it'll help."
He said officials are cautiously optimistic that the cutbacks will help return Rice Hospital to a profitable status.
All the positions that were eliminated were in administrative and support services that don't involve direct patient care. They include a mix of full-time and part-time positions.
Among them: a maintenance department director, a communications and community relations coordinator, a medical staff education coordinator, some security staff, a courier and all the in-house messengers.
ADVERTISEMENT
Cutting these positions is expected to save $367,000.
Another half-million dollars will be saved by not filling several vacancies.
"We analyzed all the vacant positions we had in the organization and made decisions about whether to fill them or not," Massa said. "We've identified a number of positions we think we can get by without."
Reducing hours in some departments -- mainly in housekeeping, maintenance and health information systems -- is projected to save $540,000.
The hospital auxiliary and the Rice Health Foundation have been asked to pay their own expenses this year, which will help trim $108,000 from the hospital budget.
The largest category -- $700,000 -- consists of "dozens and dozens" of smaller items, ranging from cutbacks in travel, education and journal subscriptions to reduced capital spending, Massa said.
For instance, the mileage allowance isn't being increased this year, he said. Reports on patient satisfaction surveys have been cut back to twice a year instead of quarterly.
"We've asked all of our departments to cut their travel and education budget by a minimum of 10 percent," Massa said.
ADVERTISEMENT
While no nursing or patient care positions were eliminated, many of these employees might see their hours reduced if the hospital census remains low, Massa said.
"We will much more aggressively try to manage daily schedules and send people home if the work isn't there," he said.
Some board members expressed concern Wednesday at the prospect of losing nurses and other direct care staff if their hours are cut.
Peggy Sietsema, chief nursing officer, acknowledged that it's hard on staff.
"The nursing work force has been very good about cooperating. But it's certainly unsettling," she said. "One way we can help fix this is to stabilize the financial situation and build ourselves back up."
Dale Hustedt, chief administrative officer, said counseling has been offered to the employees who have lost their jobs.
"We are continuing to provide information and telephone numbers about our employee assistance program," he said.
The hospital's human resources department also will help laid-off employees apply for unemployment compensation, assist in calculating unused vacation time and in other ways to get employees through the transition, he said.
