Hospitals Feel the Pain of Recession : Economy: They are eliminating jobs and trimming hours. The downturn has left many patients without company-paid insurance.

Major hospitals in the San Fernando Valley area are slashing jobs, laying off workers and consolidating operations to cope with the recession and the growth of managed care programs that set caps on hospital rates.

Six hospitals said they have already cut, or plan to cut, 10 to 150 jobs each. The hospitals have taken other cost-saving measures such as cutting back nurses’ hours, shifting workers from one department to another--instead of hiring new employees--and giving employees additional responsibilities to take up the slack left by job cuts.

Like hospitals across the nation, those in the Valley and nearby communities are feeling the effects of layoffs and job cuts by big employers that provide thousands of workers with health insurance.

Cuts at Lockheed Corp. in Calabasas, the planned closing of General Motors Corp.’s Van Nuys plant and California’s shrinking banking industry could leave thousands of Valley-area workers without health insurance, hospital administrators fear.

“Clearly, the recession has decreased enrollment in the insurance plans available, and the number of uninsured is increasing,” said Michael Weinstein, president and chief executive of AMI Medical Center of North Hollywood, which eliminated 10 management positions in August. “We are seeing some of that in the Valley, no question about it.”

Weinstein also said local hospitals are hurt as more and more small to medium-size businesses are leaving the area because of the high cost of workers’ compensation claims.

Among the hardest hit is the region’s largest hospital, St. Joseph Medical Center in Burbank, which eliminated 150 jobs, 66 through layoffs and the remainder through attrition or by consolidating duties. Employees who have direct contact with patients were spared, but the hospital is also considering cutting back nurses’ hours, said Barbara Durham, assistant administrator of human resources at St. Joseph, which has 658 beds.

The cutbacks mean more work for many St. Joseph employees, Durham said. For example, two human resource department employees take turns staffing the office’s reception desk after the department lost its full-time receptionist because of cost-cutting, she said.

St. Joseph is also relying more on its 400 volunteers, Durham said, but “it’s a difficult transition because, with paid staff, you can depend on them being there at 8 in the morning. Volunteers are volunteers. You can’t fire them for not showing up,” she said.

The cuts at St. Joseph came at the same time that another local hospital, Panorama Community Hospital, was preparing to shut its doors. The 96-bed hospital in Panorama City, which employed 275 people, closed in January as a result of longstanding losses brought on by competition from larger hospitals, new technology that reduces the length of hospital stays and health plans that direct patients to other facilities, the hospital said at the time.

Such managed care health plans have been a growing source of woes for hospitals. The plans are negotiated by employers with hospitals that promise lower rates in return for an employer’s business. But hospitals complain that they often spend more than they get back under those plans, which have proliferated in the Valley region and now serve nearly half the area’s population, according to a study by Valley Presbyterian Hospital in Van Nuys.

Tarzana Regional Medical Center, for example, said inadequate compensation caused largely by pre-negotiated rates forced it last year to slash 50 jobs--20 through layoffs and 30 through reduced work hours. Before the cutbacks, the 212-bed hospital had a staff of nearly 1,000.

Roger Drue, chief executive at Tarzana, said excessive costs may lead to further staff reductions. “We are paid based upon tightly pre-negotiated or more often predetermined rates, and not upon actual costs for services rendered,” Drue said in a statement.

Tough times have also caught up with Kaiser Permanente Medical Care Program, the state’s largest health maintenance organization, whose 321-bed Panorama City hospital serves 200,000 members in the east San Fernando Valley and the Santa Clarita and Antelope valleys. The hospital, which also operates medical offices in Granada Hills, Lancaster and Santa Clarita, recently laid off 20 of its 2,200 employees and cut hours of other workers because it fell short of its growth projections last year.

“It’s taken its toll,” said Karen Large, spokeswoman for the Panorama City hospital. “It means everybody else has to do a lot more.”

Northridge Hospital Medical Center, the region’s second largest hospital with 427 beds, in November laid off about 30 employees in a move to cut costs in its middle-management ranks. Like other hospitals in the area, Northridge said the growth of managed care is among factors hurting its bottom line.

“You’re at risk for the services that are provided” under managed care, hospital President Jeffery Flocken said.

In Van Nuys, Valley Presbyterian Hospital is contemplating cutting as many as 90 positions, said Hal Wurtzel, vice president for corporate development at the 363-bed facility, the third largest in the region.

Wurtzel said the reductions will take place across the board, from the finance department to nursing. The cuts are in response to lower patient loads last year, the result of the tough economy and the growing number of patients enrolled in health maintenance organizations and other managed care programs.

“We are aggressively pursuing managed care,” Wurtzel said. “But until such time as we are able to develop the kind of managed care business that is required, we will have rough sledding.”