Facing reductions in Medicaid payments and a weak economy, Portland-based Legacy Health System may lay off 400 workers in Oregon and Southwest Washington, a Legacy spokesman said Friday.
The bulk of the layoffs would come from the health care system’s Oregon facilities. In Southwest Washington, Legacy plans to cut as many as 25 positions, said Legacy spokesman Brian Terrett. Most of those cuts would hit Legacy’s main Washington state operation: Clark County’s Legacy Salmon Creek Medical Center.
Legacy wants to decide the staff reductions by mid-January and issue layoff notices by Feb. 15, according to a memo issued to Legacy staff by the organization’s president and CEO, George Brown.
“Patient care quality and strategic growth areas are our first priority and will be spared as much as possible,” Brown wrote in his Dec. 15 memo. “However we will examine all areas of Legacy to search for expense reduction opportunities.”
Headed into 2012, Legacy faces a budget shortfall of $40 million, driven mainly by cuts in Medicaid reimbursements made by the states of Oregon and Washington, Terrett said. Medicaid, a government health care program jointly funded by the federal and state governments — and run by the states — serves low-income and disabled people.
“Severe Medicaid cuts and increases in the number of uninsured patients are responsible for most of our budget gap,” Brown wrote in his memo.
Terrett said the 400 layoffs are based on estimates. He said the final number could be lower depending on savings Legacy finds by leaving some open jobs unfilled and by negotiating early retirements of some employees.
Terrett said he expects other health care systems in the region will face similar decisions. “We probably won’t be the only system that will be making these kinds of announcements,” he said.
In his memo to Legacy employees, Brown wrote that Legacy “has been able to hold out longer than the other systems in the area, all of which have had significant (job) reductions over the past 2-3 years and are still reducing expenses.
“Medicaid reductions and the prolonged economic downturn have forced our hand.”
In Clark County, Southwest Washington Medical Center — now renamed PeaceHealth Southwest Medical Center — laid off 30 of its 2,500 employees in the summer of 2010 as part of an effort to cut roughly $32 million from its $462 million budget.