Fresno, Calif.-Area Health Care Provider Cuts 175 Positions

By Tracy Correa, The Fresno Bee, Calif.

Feb. 2–Community Medical Centers, the Valley’s largest health-care provider, is cutting 175 positions by the end of March in an attempt to regain its financial footing.

John Zeleznyenior vice president and spokesman for Community Medical Centers, said management began notifying affected employees Tuesdayd Wednesday, and expected to continue notification through Friday

“They are being notified as we speak,” he said Wednesday. Community has about 6,500 workers. The layoffs are effective March 31 and are expected to save about $9 million annually, Zelezny said.

The cuts affect all three of Community’s nonprofit hospitals, corporate offices, and the Community Behavioral Health Center. Community operates Community Regional Medical Center and University Medical Center, both in Fresno, and Community Medical Center-Clovis.

“It’s really spread out; there is no particular department being singled out,” Zelezny said.

He said one of the positions being eliminated is senior vice president of human resources, a job held by Linzie Danielowever, Zelezny said Daniel will still be doing “some assignment work for us.”

“Twenty to 30 other positions are in management, all levels of management — managers directors, supervisors and others,” he said.

Tim Joslinommunity’s new CEO, warned employees in a memo earlier this week that 175 jobs would be eliminated as part of the effort to manage costs. He said affected employees would be notified over the next few days. The memo was part of an organizational update Joslin provided to staff that also talked about Community’s efforts to secure higher Medi-Cal reimbursement and boost overall quality at its hospitals.

The memo was dated Mondayut Zelezny said it didn’t go out to employees until TuesdayIn the memo, Joslin wrote, “I do not take this lightly, for I’m quite aware that layoffs cause hardship. … This week’s action is intended to put us on target with a single reduction and avoid the disruptive and morale-bruising prospect of periodic layoffs over several more months or years.” He also told employees that financial counseling and outplacement assistance will be made available.

Community has an operating budget of about $750 million and is struggling.

The hospital had a $10.8 million operating loss in the fiscal year ended August 2004 and was expected to report an even larger loss for 2005. The hospital has been buoyed by investment income and other nonhospital revenue in past years, which helped minimize overall or bottom line losses. However, bond rating companies have repeatedly downgraded the corporation’s credit rating based on the large operating losses. Credit ratings affect future borrowing and interest rates.

Analysts have linked some of the hospital’s financial problems to the for-profit heart hospital, which opened in 2003 and lost $10 million its first year. Community officials said it lost another $4.5 million last year.

Community is in need of money to complete the merger of the former Valley Medical Center’s burn and trauma units into Community’s downtown Regional Medical Center, part of 1996 agreement it made with Fresno County. Joslin has said Community is $70 million to $90 million short of what it needs to complete the transition.

Zelezny said the staffing cuts are part of what Community must do to operate as lean as possible.

He said hospital management looked at staffing at other hospitals as benchmarks for Community’s facilities before deciding on cuts. “It wasn’t just a wild guess,” he said. “We looked at staffing levels at comparable hospitals around the country and used those benchmarks as a guide to where we should be in terms of staffing and in terms of costs overall.”

Zelezny said the cuts won’t cause the elimination of any programs or services. There are very few job cuts in clinical areas such as nursing, he added.

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