Medical center plan lays off 176 workers
By Guy Ashley, CONTRA COSTA TIMES
Posted on Wed, Nov. 19, 2003

OAKLAND - Trustees of the Alameda County Medical Center said Tuesday that 176 employee layoffs and deep cuts in services are needed to offset a projected budget deficit that has ballooned to nearly $86 million.

The cost-cutting plan presented Tuesday would require drastic steps, such as closing obstetrics services and wards in three hospitals. Medical center trustees made the proposal along with grim new findings that the center's projected deficit is nearly twice the size of estimates released five months ago.

The medical center's financial woes are so massive, interim CEO Efton Hall Jr. told an audience of about 100, that the task of balancing the budget will take more than a year to complete. The plan released Tuesday covers only $53 million of the deficit.

"We do not have $86 million in fat in this organization to cut," Hall said.

Hall said all segments of the medical center operation would feel the pinch of the cost-cutting measures. He asked his staff to look for other savings and additional revenue sources as they were absorbing the pain of a drastic cost-cutting regimen.

The budget-balancing plan is the latest turn in the financial crisis that in the past year has overwhelmed the medical center network, which is composed of Highland Hospital in Oakland, Fairmont Hospital and John George Psychiatric Pavilion in San Leandro, and clinics in East Oakland, Hayward and Newark.

The center's fiscal problems also have come at great cost to budget-strapped Alameda County, which has been pumping millions into the network in recent months just to keep it operating.

The cost-cutting plan presented Tuesday calls for closing obstetric services and the telemetry ward for cardiac patients at Highland Hospital, and shuttering a 21-bed ward at the 80-bed John George Psychiatric Pavilion and a 32-bed unit at the Fairmont Hospital Skilled Nursing Facility.

The plan also calls for reductions in food service, an organization-wide freeze on the purchase of computers, and cost reductions in the budgets of administration, public relations, strategic planning and the board of trustees.

Hall said laying off 176 full-time employees means nearly every department within the medical center would lose workers, including communications, policy and planning, nursing, ambulatory care, finance, medical records, social service, food service and human resources.

He said the center's executive staff will also seek to come up with $17.1 million in revenue enhancements over the next six months by restoring the number of paying patients treated by the network to the levels of a year ago. A skid in patient volumes over the past several months has been aggravated by a growing number of uninsured and indigent patients who cannot pay for their care.

One hope for new revenues is a proposed half-cent sales tax that the Alameda County Board of Supervisors is poised to place on the March 2004 ballot.

The measure would raise an estimated $90 million annually and focus its resources on health care, and the medical center in particular.

But the plan seems to be stumbling out of the gate, with supervisors divided over how much money generated by the sales tax should be guaranteed to the medical center. The board is scheduled to vote on the final wording of the measure next Tuesday.