With Inpatient Level Down, CHOC Lays Off 17 Managers

Reflecting a national trend in hospital downsizing, Children’s Hospital of Orange County laid off 17 managers Tuesday, a move forced by the steady decrease of inpatient care, hospital officials said.

“The layoff is related to . . . [CHOC] having fewer patients in the hospital,” said spokeswoman Jena Jensen. “We have fewer patients on the inpatient side because of the pressure from managed care to move people into outpatient care.”

The staff reduction took effect Tuesday and will be permanent, Jensen said. It was not immediately clear how much money the hospital will save with the cutback, she said.

CHOC recently did a survey concluding that, compared to other area hospitals, CHOC was overstaffed in managerial positions, Jensen said.

The layoffs, targeting 16 managers and a vice president of business development and management care, marked the first time the hospital has been forced to reduce its staff, she said.

“Consistently in Orange County and across the nation, hospitals have been experiencing lower inpatient level,” Jensen said. “This move will allow us to streamline our operation costs.”

CHOC, which has about 1,200 employees, has a sister facility in Mission Viejo. No positions are expected to be eliminated there, Jensen said.

Experts say the heavy emphasis on managed care and resulting cost savings have resulted in hospitals throughout the United States continually being bought and sold, closed or reorganized.

Nowhere are the changes coming faster than in Southern California, where hospitals have been closing at an accelerated rate. Since 1991, 37 hospitals in the six-county Southern California region have closed.

From 1960 to 1990, vacancy rates in hospitals were at relatively low levels, with 65% to 70% of the beds always full. But now, fewer than half the hospital beds in Southern California are occupied at any one time, according to industry reports.

A factor contributing to the empty beds is the financial incentives created by the managed-care industry that reward physicians and hospitals for keeping their patients out of hospitals or sending them home in the shortest time possible.

Other factors include advances in drugs, surgical techniques and home-care services that have prevented many hospitalizations, according to the industry.