In its latest effort to close a $9-million revenue gap, San Pedro Peninsula Hospital on Thursday said it has consolidated several departments, reclassified a number of management positions and will eliminate the equivalent of 100 full-time jobs--some through layoffs--by Oct. 1.
Hospital President John Wilson said job reductions will involve attrition, reduction in hours and reclassification. He said there will be some layoffs beginning next week, but he doesn't know how many.
Wilson said the reorganization plan is the final segment of a program under way since January by the national accounting firm of Ernst & Whinney to stem the flow of red ink. The plan was unanimously approved by the hospital board, Wilson said.
Previous Ernst & Whinney recommendations put into effect have included 109 layoffs, reduction in work hours of 26 other employees and elimination of the family practice residency program and in-patient psychiatric services. The hospital also sold its outpatient dialysis unit to Innovative Dialysis Systems Inc., which is continuing to operate it.
Wilson said the entire Ernst & Whinney package will save the hospital $8 million a year and will bring the ratio between the number of employees and patients to 4.2 to 1. Prior to the streamlining measures, the ratio was 6 to 1.
Wilson said the hospital already is seeing improvements in its financial situation. "We've cut our losses by $2 million in the year to date," he said. "As we implement the changes, it will get better."
In a memo Thursday, Wilson told employees that job positions to be eliminated "will be determined in the near future." Those who lose jobs will receive "appropriate severance and job-search counseling," he said.
He called such action unfortunate but "absolutely necessary if the hospital is to get back on its feet financially."
Reduction in Jobs
At the same time, he said the hospital does not anticipate further layoffs after Oct. 1.
Prior to Thursday's reorganization announcement, the hospital reduced the number of directors jobs from 38 to 14. The former administrators were made line supervisors. There were no salary reductions for those who were reassigned, but future employees in those jobs could receive less money, Wilson said.
Before Oct. 1, the hospital will implement a flexible staffing program that will permit it to maintain a daily staff level based on patient volume. This would be accomplished by adjusting hours of part-time and daily employees.
"This is to avoid substantial layoffs in the long run," Wilson said.
Several hospital departments--among them radiology, cardiology, food services, central supply and medical records--have been consolidated into fewer but larger departments. Hospital management eventually will be organized into three main divisions--patient services, medical support services and financial and information services.
Wilson told employees that the new structure "will help us enhance productivity, improve communications and make it easier for all of us to provide excellent health care to our patients."