Declining Revenue Forces Hospitals to Cut Staff

United Western Medical Center-Santa Ana said Wednesday that it laid off 40 workers in various departments last week, and St. Joseph Hospital in Orange said it laid off 44 staff members two weeks ago, most of them registered nurses.

The cutbacks are the latest in a series of personnel reductions at several Orange County hospitals suffering in an industrywide slump caused by insurance-mandated shorter hospital stays and a decline in Medicare reimbursement.

Western Medical, citing those reasons, laid off 60 workers--mostly in clerical and administrative positions--in December.

Several hospitals in the county said Wednesday that the number of hospital beds occupied on a daily basis is down as much as 10 percentage points from a year ago.

At Martin Luther Hospital in Anaheim, where occupancy so far this year is averaging 49.9%, the lowest level ever, the number of employees has been reduced by about 100 over the past 18 months through an attrition program, said Betty Bartley, a hospital spokeswoman.

Bartley said average daily occupancy at the 200-bed hospital is down from about 58% last year. The hospital now employs 580.

At Fountain Valley Regional Hospital and Medical Center, the staff has been trimmed by 100 workers, to 1,397, through attrition over the past year, said spokeswoman Sheila Holliday.

And in April, St. Jude Hospital and Rehabilitation Center in Fullerton laid off 35 employees, citing lower occupancy and the consolidation of several of its units.

While occupancy rates are down, the number of people visiting hospitals is increasing, most officials said. The trouble is that stricter insurance guidelines have reduced the length of hospital stays and increased the number of patients receiving outpatient treatment.

“There’s no way to solve the occupancy problem,” said Dennis Gaschen, a spokesman for St. Joseph Hospital.

A consulting firm began analyzing St. Joseph’s operations last month in an attempt to reduce the hospital’s fixed operating costs. Gaschen said the hospital expects to save about $1.5 million by following recommendations the consultant might make. He said that the late May layoff of nurses will produce an additional $1 million in annual savings.

“Labor is a quick-fix, but we decided we need to look at overall operations,” Gaschen said.

He said occupancy at St. Joseph dropped to 72% in the first quarter of this year, down from 82% in the same period last year. He said he doesn’t expect the rate to improve anytime soon.

At Hoag Hospital in Newport Beach, occupancy has dropped about 8% in the past year, and was 78% in May, said Peter Foulke, senior vice president of finance.

But Hoag has increased its work force over the past year as it has added new services, Foulke said.

And not all hospitals are reporting occupancy declines.

The 400-bed UCI Medical Center in Orange, which employs about 4,800 workers and treats many of the county’s poor, had an 89% occupancy rate in May, about the same level as a year ago. The consistent rate is attributed to the large number of indigent patients that use the hospital, said spokeswoman Fran Tardiff.

After its most recent layoff, Western Medical Center in Santa Ana, with a 44% average daily occupancy rate, now employs about 1,200 workers.

The layoff, which was ordered last week, idled hospital support workers in areas such as radiology, respiratory therapy and housekeeping. No further layoffs are planned, said spokeswoman Jena Jensen.

The 327-bed hospital is part of United Western Medical Centers, which operates two other health facilities in the county. Jensen said there are no plans for cutbacks at the other facilities, but that the company will be reviewing its operations.

Western’s problems follow the resignation in early December of its founding president, Wayne D. Schroeder. His departure, after 21 years with Western, was thought by some in the medical field to signal impending financial difficulties and layoffs at the facility.