Alta Bates Summit Medical Center announced last week it will cut about 300 jobs throughout California by the end of the summer to stop their on-going financial hemorrhage.
“The medical center continues to experience major financial losses every month,” said Irwin Hansen, president and CEO of the Alta Bates Summit Medical Center. “The magnitude of our shortfall is far beyond what we expected. We must immediately address this critical situation.”
Health care workers worry that this decision may put the hospital’s services under strain.
“There is not a decline in their census,” said John Borsos, hospital division director of the Service Employees International Union (SEIU). “The hospital is already short of staff. We have strong concerns about who is going to do the work.”
In the past year, Alta Bates Summit Medical Center, which was formed when Alta Bates and Summit merged in December 1999, has lost $19 million. Hansen said it could lose as much as $40 million in 2001 if it does not take quick measures. Sutter Health, a company that runs 33 hospitals in Northern California, took over the hospital after the merger.
The labor reduction, Hansen said, is expected to allow the company to save $15 million. To cut expenses, Alta Bates Summit will also re-evaluate open positions, and adopt a series of management changes.
“We are also doing some changes looking at supply, standardization and bad debt,” said Jill Gruen, a spokesperson for the hospital.
The financial loss is the result of a combination of factors, according to Gruen. A few months ago, Alta Bates experienced unexpected expenses when employees went on a series of one-day strikes. As a result, the company agreed to raise the wage of 60 percent of its employees within four years. Additionally, a nursing shortage forced the hospital to bring in expensive temporary nurses. Finally, Gruen said, the company lost a large amount of money due to the unpaid patient bills.
It is not clear how many jobs will be lost at Berkeley’s Alta Bates Medical Center. But Gruen said the action plan to be implemented by mid-August will try to avoid the lay-off of full-time employees.
“We’re trying to look into registry nurses and replacement,” she said. “Eligible employees will be offered early retirement.”
SEIU Local 250 immediately reacted to Hansen’s announcement, denying the hospital’s claims that the lay-off was the result of unpredicted financial losses.
“Executives’ claims that these cuts were caused by recent financial shortfalls are merely a smokescreen – part of an effort to try to win the public acceptance of [the] cutbacks,” said Sal Rosselli, president of SEIU Local 250 last Friday in a prepared statement.
According to Rosselli, this is just another example of Sutter Health’s policy of slashing services.
“When they take over one hospital and merge it, they eliminate services and reduce access to care just to take dollars out of the health care system to fill their corporate expenses,” Rosselli said in a telephone interview.
Sutter Health, union leaders say, had planned job cuts for more than two years. They base their accusation on a Sutter Health planning document from June 1999. The document includes an action plan proposal that would cut 5.67 of the Medical Records Department positions.
To Gruen, however, that document does not prove anything.
“The document was never a management plan. It was never used to make a decision,” said Gruen.
SEIU Local 250 hasn’t been notified of any lay-offs yet, but some are meeting to discuss strategies in fighting the cutbacks.
“Workers of Alta Bates and Summit Medical Center are in a strategy planning session to make sure that the interest of patients and workers come before profits,” said union spokesperson Dave Bates yesterday afternoon.
The union, Bates said, may avoid lay-offs by documenting the hospital’s shortstaffing. It is also looking at ways to make Sutter avoid lay-offs by retraining workers for other jobs, he added.