With midyear losses reaching $2.5 million, UCI Medical Center announced Tuesday that it is laying off 151 workers in an effort to streamline operations, consolidate services and compensate for ever-dwindling government funding.
"This kind of thing is unprecedented in this marketplace and really in the health-care business in general," said Mark A. Laret, executive director of the medical center. "But what we're undergoing is a transformation of the health-care business. An inevitable downsizing of hospitals is taking place all across the nation."
Unions representing the workers criticized the decision as being motivated solely by fiscal concerns and predicted the cuts would have a "tremendous" effect on the community at large by compromising "quality health care."
Les Lyon, president of Local 3251 of the Patient Care Technical Unit, which was hit with the largest cuts, losing 90 employees, said the medical center is left trying to provide "top sirloin care on a bologna budget."
The restructuring includes 134 "career staff" layoffs. In addition 17 so-called "casual" (temporary) employees and "probationary" workers will be terminated. Officials for the medical center also announced reduced hours for 55 other employees.
The layoffs will cut across all levels of medical center personnel, officials said, including senior management, administrative and clinical employees. Employees whose jobs were eliminated were notified Tuesday and given 30 days' notice.
Layoffs became imperative, Laret noted, in the wake of UC Irvine receiving $20 million less during the current fiscal year than it has in the past from a government program that reimburses hospitals that treat a disproportionate number of indigent or poor patients.
In the 1994-95 fiscal year, UCI Medical Center allocated more than $28 million for so-called "charity care," which hospital spokeswoman Carolyn Cohen Carter defined as medical care that cost more than its expected reimbursement will generate.
Laret said Tuesday's layoffs will help the hospital save about $13 million a year in annual operating expenses. In a foreshadowing of Tuesday's announcement, Laret said last month that the net loss for the budget year ending in June could exceed a preliminary estimate of $4 million given to the University of California Board of Regents. Shortly after arriving at the medical center, Laret predicted the deficit could climb as high as $9 million by the end of the fiscal year.
He said the hospital is getting paid "less and less" by patients, health insurance companies, HMOs, Medicare and Medi-Cal "to provide the same care that we have provided in the past."
Still, news of the cutbacks comes as another grim setback in a bad year for the medical center, which was beset last spring by a fertility scandal that sullied its reputation nationally. Three of its doctors are accused of stealing eggs and embryos from scores of women and implanting them in others.
But on a personal level, Tuesday's announcement was by far the hardest for rank-and-file workers to fathom.
"We recognize that downsizings involve real people with real lives and livelihoods . . . and families," Laret said, "and that's the most painful part of my job."
Despite knowing that layoffs were imminent, union chiefs who represent the center's 2,600 employees said they were surprised and in some cases stunned by the types of positions Laret chose to eliminate.
"We weren't expecting to see so many longer-term employees eliminated--people who are a lot more senior and experienced than many of the ones they chose to keep," said Cynthia Hanna, council representative for the American Federation of State, County and Municipal Employees, which represents about 135, or roughly 90%, of the laid-off workers.
Hanna said the layoffs were "alarming" in that they targeted "highly compensated, highly experienced" psychiatric administrators as well as employees in the medical center's highly touted cancer center.
Also affected was a large part of the patient-care equipment pool, which Hanna said includes about 90 people who repair much of the sophisticated, high-tech equipment found in patients' rooms.
UCI Medical Center has 369 beds plus 93 psychiatric beds for total of 462 licensed beds. Current occupancy is 241 patients.
"We're wondering how they're even going to do those jobs," Hanna said, noting that lower-paid employees who transport much of the same equipment will now have the new and unfamiliar task of also repairing it.
While conceding that cuts were probably inevitable, Hanna said, "There's no question they're losing money--but why they're losing money is another issue entirely."
She criticized sharply the recent purchase of a line of new hospital beds--most of which have yet to be used, she said--and which cost the hospital more than $60,000 apiece, when the average cost of a conventional hospital bed is about $10,000. Medical Center spokeswoman Carolyn Cohen Carter said the hospital also recently remodeled its operating room.
Hanna also condemned the university's controversial decision to pay the three so-called "whistle-blowers" in the fertility scandal termination settlements totaling more than $900,000.
Laret confirmed the purchase of the beds as well as their sale price but said that they were bought before he arrived and that he didn't know the exact number. However, he defended the necessity of such "capital expenditures" in running a modern-day urban medical center.
In addition, he called Hanna's comparisons unfair, noting, "There's a big difference between capital expenditures, such as money for beds, and ongoing operational expenses."
Nevertheless, Hanna called the layoffs "horrible" and said, "This is going to have a devastating effect on people, many of whom make $30,000 a year or less. Some of them have worked there since the 1970s, and now they have nothing."
Yet Hanna said she thought the hospital had benefited by the hiring of Laret, who last August replaced former executive Mary Piccione, who was fired by UCI Chancellor Laurel L. Wilkening for poor oversight of the Center for Reproductive Health and managing the medical center "by fear."
Laret, a former deputy director at UCLA Medical Center, is paid $192,000 a year.