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Rogue Valley hospital cuts 20 positions

MEDFORD — After losing about $1 million during the first two months of the current budget year, Rogue Valley Medical Center and its parent company announced a hiring freeze Wednesday andcut about 20 full-time positions at the region's largest nonseasonal employer.

Asante Health System reduced staff in non-patient-care areas, including communications and marketing, patient registration, medical records, human resources and its fundraising foundation. Some 80 positions now open will not be filled, said Roy Vinyard, Asante's president and chief executive officer.

Vinyard said Asante lost about $1 million for the first two months of the current fiscal year, which began Oct. 1, 2008, and fell just short of breaking even for the fiscal year that ended Sept. 30, 2008.

"We felt strongly we needed to take steps to get us on a sound financial footing," he said Wednesday.

Hospitals generally try to earn 3 to 7 percent more than they pay out to have money to spend for new equipment, salary increases and improvements.

Along with RVMC, Asante operates Three Rivers Community Hospital in Grants Pass, Genesis recovery center in Central Point, and Hearthstone, a skilled nursing center in Medford. Altogether it employs more than 4,000 people.

Vinyard said only positions that are critically necessary to patient care will be filled during the freeze, but he stressed those positions would be filled. All executive team members, department directors and managers (about 120 people) will forgo a 3 percent annual wage increase this year. Vinyard said other employees already have received their annual increase.

Vinyard said hospital patient volume is down about 5 percent over last year, and the hospital typically budgets for an increase in volume of 2 to 4 percent per year. He said people are postponing elective procedures, such as hip or knee replacements, if they can.

People who have lost their jobs — and their health insurance — in the recession are also staying away from the hospital.

Vinyard said Asante's financial squeeze reflects "what's happening across our state and nationwide. Health care is not exempt from financial downturns."

As the number of paying patients has declined, the ranks of those who cannot pay for their care have increased. Vinyard said Asante is looking at about $60 million in uncompensated care for the current budget year.

Uncompensated care has been rising at a rate of about 18 percent per year, he said.

Federal law prevents hospitals from refusing treatment to people who seek treatment at the emergency department. The costs for those who are unable to pay for the care are counted either as charity care or bad debt, depending on the circumstances of each case.

Asante also has to pay interest on the bonds it issued to rebuild much of the hospital and construct a new six-story bed tower that opened in 2005. In November 2005, Asante issued $170 million in bonds to complete the RVMC expansion, build new patient rooms at Three Rivers in Grants Pass, and refinance some existing debt. At that time officials said bond interest would be about $11.4 million per year.

A supply and material waste committee will be formed to identify opportunities to reduce supply costs, and all programs will be evaluated to make sure they are critical to Asante's mission and the core health needs of the region.

Vinyard stressed that Asante will remain a "strong, viable organization, and we'll continue to be here."

He said other staff reductions could occur as managers look for the most efficient way to provide care.

"We're trying to preserve employees and improve efficiency," he said.

Reach reporter Bill Kettler at 776-4492 or e-mail bkettler@mailtribune.com.