Beginning in June, St. Charles Health System announced an initiative to cut costs.
"Since that time, our employees and leadership have been working really hard on efforts to contain costs and improve revenue," said Jenn Welander, chief financial officer. "But our financial performance is just not improving at the rate we had hoped, so we're at the point of needing to take some additional steps to accelerate the financial improvement."
"As we look to do that, the thing that is at the top of our mind is the safety of our patients and the overall quality of care that we provide," said Welander. "So, those themes will drive our decisionmaking as we look at additional cost reduction initiatives."
Back in June, Welander explained that SCHS and other hospitals across the state had seen an improvement in their finances that started in 2014, when most provisions of the Affordable Care Act took effect, expanding eligibility for Medicaid, and mandating U.S. citizens and legal residents to have insurance coverage.
"Starting in 2014, we, like others across the state did benefit from the ACA because we had more people with insurance covered under Medicaid; that caused our charity care and bad debt to go down," she noted.
Those positive changes began to reverse with the expiration of federal government payments to offset insurance company losses, the weakening of enforcement of the individual health care mandate, and the uncertainty created by efforts to repeal and replace the ACA.
As a result, SCHS has given all areas of the health system — hospitals, clinics and support services — a target to aim for this year. "We're trying very much to be ahead of the communications with our employees and the media, so not all of our initiatives have been finalized," she said.
Some of the possibilities under discussion to cut approximately $6 million from the system's expenses include:
- Leveraging turnover or attrition to not fill open positions. "We're doubling down on our efforts in those areas," she said. "Every time, you have to think about the work flow and processes, so we're undertaking that effort with more rigor and vigor."
- Starting a voluntary buyout program for caregivers who are willing to give up their positions.
- Spreading the success of a process improvement project conducted over the past six months. "It helped in the way we recruit people and it's helping us reduce our premium and overtime pay," said Welander. "We achieved our results just this month (August), so we're trying to take the learning and spread them to other parts of the organization."
"With all these initiatives that we have underway and the new ideas we're exploring, we hope that's enough to achieve our targets," she said. "But if they're not, layoffs may be necessary."
"These challenges that we face are really prevalent throughout health care right now, and in Oregon, so we're not unique," she noted. "With that said, it's our responsibility as an organization to make sure that we're doing everything necessary to keep St. Charles a viable, long-term organization. Our community is really depending upon us to do that."
The cuts will not affect the $16 million expansion and renovation project at St. Charles Madras, which remains on track. The third and final phase, which will include a central registration point and galleria, located just east of the temporary entrance on the north side of the hospital, will be completed in November.
The hospital currently has 132 full-time equivalent employees, with another nine at the Family Care Clinic, as well as support teams, which bring the total to about 150-160 employees, she said.