St. Helena Hospital announced this week that it’s eliminating 40 full-time positions in an attempt to remain viable while it weathers heavy financial losses.

Twelve of the 40 positions are unfilled. The 28 affected employees got the news last week.

The cuts are primarily in accounting and general administration. All eight of the affected nurses will be reassigned.

The hospital’s St. Helena campus currently employs about 650 full-time workers.

St. Helena Hospital President and CEO Terry Newmyer said the layoffs are part of a broader restructuring. The new plan calls for decreasing overhead and increasing efficiency while rapidly growing the hospital’s emergency department and the new cancer, heart disease and outpatient surgery facilities opening this fall.

In time, Newmyer said, he hopes the growth initiatives will create at least as many new jobs as the hospital is cutting.

The hospital is also suspending for six months programs that help patients stop smoking and lose weight.

St. Helena Hospital has been hit hard by the state’s decision last October to reduce Medi-Cal reimbursements, said Newmyer.

The hospital serves about 5,000 Medi-Cal patients a year, and state reimbursements for that care fell from $5 million to about $2 million.

That had a “crushing impact” on the hospital’s bottom line, said Newmyer. “The salary money for about 30 nurses just vanished from the hospital,” he said.

The hospital was losing about $1 million a month through March, and now the loss stands at between $400,000 and $500,000 a month.

The cost-cutting measures the hospital is implementing will save an estimated $3 million this year and $8 million annually by 2010.

Newmyer said he hopes that a recent court ruling and legislation supported by Assemblywoman Noreen Evans, D-Santa Rosa, will help restore the $3 million in lost Medi-Cal payments.

Regardless of whether that happens, he said the hospital needs to change to stay viable.