Santa Paula Hospital Lays Off 7 Workers to Help Cut Costs

Santa Paula Memorial Hospital has laid off seven employees in a cost-cutting move to cover an operating deficit of about $700,000.

The final pink slips were handed out Tuesday, Chief Executive Officer Bill Greene said. Patient care should be unaffected by the layoffs, which include managerial, clerical and technical employees, he said.

‘This is a plan of positive direction,” Greene said. “It unfortunately has a slight negative side to it. It’s a plan for financial stabilization, future growth and to ensure continued medical services to the Santa Clara Valley.”

The layoffs, the nonprofit hospital’s first, amount to about 3% of its 230-person staff. Some workers’ hours will also be reduced and such contracted services as landscape maintenance will be conducted in-house, Greene said.

The hospital has lost money for at least five years. The layoffs are part of a management plan adopted last week to reduce the hospital’s annual operating costs, Greene said.

“We feel we need to establish the hospital’s ability to stand on its own and not have to go to the community to ask for their support to keep the doors open,” he said. “All we’re setting for an objective is [to] break even this year.”

The hospital’s problems are not unique. Managed-care companies are reining in health-care costs, which translates into more outpatient care, Greene said.

“We want to be independent financially, viable, and we believe we can be,” said Chairman Russ Hardison a board member since 1965. “We not only are looking at all costs, we’re looking at other streams of revenue.”

Those include boosting the 33% occupancy rate of its 60 beds by using one-fifth of them for Medicare convalescent patients. The hospital is also seeking to increase its 43% market share by persuading health-care providers, including the county, to use its facilities, Greene said.

Adding medical services to increase competitiveness is under consideration.

The board adopted the management plan in conjunction with Quorum Health Resources, a company based in a Nashville suburb that manages 252 hospitals nationwide. Quorum was recruited in 1994 to help control costs.