PeaceHealth to cut 500 jobs in Washington, Alaska and Oregon

THE BELLINGHAM HERALDAugust 27, 2013 

PeaceHealth will cut 500 jobs to help close a $130 million gap in its budget systemwide, employees were told Tuesday, Aug. 27.

That will translate into 10 to 20 positions in Whatcom County, with seven of them already eliminated through attrition, restructuring and cross-training, said Nancy Steiger, CEO for PeaceHealth's Northwest Network.

"The rest we are still working on," she said.

The Northwest Network covers PeaceHealth hospitals and medical practices in Whatcom County, on San Juan Island and in Ketchikan, Alaska.

The network's share of the deficit is $10.2 million, of which about $5.5 million remains to be cut, according to Steiger's memo to employees on Tuesday.

She told them the network's "budget gap is not nearly as large as in other PeaceHealth networks." That's due, in part, to changes made in programs and services over the years, as well as being strict about what positions to add, she explained.

As for the 500 positions to be eliminated, about 340 are coming from the Columbia Network in Oregon, Alan Yordy, president for the entire PeaceHealth system, said in a Tuesday memo to employees.

The Columbia Network is where Kaiser Permanente Northwest is switching its referrals from the PeaceHealth Southwest Medical Center in Vancouver and instead sending its 100,000 members in Clark County to Legacy Salmon Creek Medical Center, beginning in October.

To cut its budget, PeaceHealth also is reducing costs related to equipment, supplies, travel, food, education and services. It also is working to increase revenue.

PeaceHealth also will leave vacant positions unfilled, Yordy said, a move that will account for one-third of the total number of job cuts needed.

He said layoffs were a last resort, adding that the goal was to focus on support and management positions "in order to keep critical staff at the bedside and in PHMG (PeaceHealth Medical Group) and ambulatory clinics."

Steiger echoed that statement.

"Our goal is to preserve the resources closest to the patients," she said. "That's our highest focus, to make sure that patient care is not interrupted in any way."

Exactly how many employees could be laid off wasn't known Tuesday because, PeaceHealth officials said, some of the positions were vacant and some were held by more than one employee because they're part-time.

"I am deeply saddened," Yordy stated in his memo. "I recognize that this will be very painful and difficult for all of us, especially those dedicated caregivers and their families whose positions will be eliminated."

PeaceHealth executives announced the $130 million deficit in July, with Yordy calling it "an unprecedented budget challenge."

The amount is about 5.5 percent of the nonprofit health care system's projected operating revenue of $2.4 billion in the fiscal year that began July 1. It has hospitals and medical facilities in Washington state, Alaska and Oregon.

Executives said PeaceHealth remained strong financially but faced the same challenges as other health care providers across the country. Those challenges include fewer patients, rising expenses, lower reimbursement rates, and mandated investments in electronic health record systems as part of federal health care reform. The electronic health record is expected to cost PeaceHealth $350 million in the next few years.

PeaceHealth provides most of the health care in Whatcom County and operates the only hospital here. It's also the largest employer in the county.

PeaceHealth has about 2,767 employees in the region that includes Whatcom County, the Peace Island Medical Center on San Juan Island and a specialty clinic in Sedro-Woolley.

Yordy stated in July that $100 million in savings had been identified, while the other $30 million must be found in the next two months.

Reach Kie Relyea at 360-715-2234 or kie.relyea@bellinghamherald.com.

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