Queen of the Valley Medical Center laid off 55 employees Wednesday and reduced the hours of an additional 20 employees.
The hospital has been working to close an $8.3 million budget gap, which President and CEO Walt Mickens said was created by the economic downturn, decreased reimbursements for patient services, fluctuating number of patients and sharp increases in charity care and bad debt.
The reductions affected employees at all pay grades and levels of training including managers, licensed health professionals, support, assistive and clerical staff members.
Affected employees were given a 90-day advance notice rather than the required 60-day notice to provide them more time to adjust to the transition, Queen spokeswoman Vanessa deGier said. Eligible employees also will receive severance pay and benefit continuation based on years of service, personalized career planning and job search support, and spiritual counseling, Mickens said.
“My thoughts and prayers go out to these individuals. They are dedicated employees, co-workers and friends. Their departure is our loss,” Mickens said in a letter to employees.
The hospital, which employs 1,425 people, had its last round of layoffs in 2008. Eighty positions were expected to be eliminated that year, but fewer than 50 positions were actually cut, deGier said.
Last year, the Queen faced an even larger budget deficit of $23 million. That number was brought down due to revenue increases and budget decreases, including a request for voluntary layoffs in which 39 employees took buyouts, deGier said. A memo sent to employees at that time did not rule out the possibility of “involuntary” workforce reductions.
Over the past several months, executives at the Queen have worked to reduce the budget without eliminating positions. Mickens said they have:
• decreased department budgets;
• held wages at current levels;
• not replaced jobs when someone leaves;
• reduced other non-salary expenses such as travel and catering.
These efforts reduced the budget shortfall by $4.5 million, deGier said.
“Unfortunately, these actions were not enough to align revenue and expenses and we had to look to staffing as an area to cut spending,” Mickens said.
Payroll and benefits consume the largest portion of the hospital’s annual budget, accounting for more than 60 percent of the expenses the hospital incurs each year, deGier said. The reductions will save the hospital $3.2 million.
Some of the employees whose positions are being eliminated will be eligible to fill open positions at the Queen or within St. Joseph Health System, the parent organization of the hospital.
“We are working to do everything we can to find positions for impacted employees where appropriate,” said Robert Eisen, vice president of Human Resources.