Legacy Salmon Creek lays off 30 workers

Shrinking state Medicaid payments help drive system’s cuts

By Aaron Corvin, Columbian port & economy reporter

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Clark County’s Legacy Salmon Creek Medical Center has eliminated 30 jobs as part of a larger cost-cutting move to deal with the impacts of reduced Medicaid payments and a weak economy.

Most of the job cuts — representing about 3 percent of the total workforce — came from the Salmon Creek facility’s nonclinical staff, including administrative, information and registration services, food services and gift shop employees, said Brian Terrett, a Legacy spokesman.

The Salmon Creek hospital cuts were part of 362 layoffs made in Oregon and Southwest Washington by Portland-based Legacy Health System.

The bulk of the layoffs — all of which took place by Feb. 15 — came from the health care system’s Oregon locations.

The staff reductions were aimed at bridging a budget shortfall of $40 million this year.

Most of the budget gap — about $30 million — was driven by cuts in Medicaid reimbursements made by Oregon and Washington, Terrett said. Those states have reduced spending in a weak economy that has lowered tax revenues.

Medicaid, a government health care program jointly funded by the federal and state governments, and run by the states, serves poor and disabled people.

The rest of Legacy’s revenue shortfall stemmed from an increase in the number of uninsured patients seeking care at its facilities, another mark of a tough economy in which some people can’t afford to pay their medical bills.

“We’re seeing a larger number of people who are self-pay,” Terrett said. “Most of those people will become charity care cases.”

Terrett said Legacy’s staff reductions — coupled with operational savings — will bridge the $40 million budget gap. To achieve the operational savings, Terrett said, every department will be asked to examine its budget and to “identify areas where they’ll spend less money.”

Terrett said the job cuts are permanent, reflecting Legacy’s need to provide services in a leaner, more efficient way in the future.

Legacy planned to decide the staff reductions by mid-January and to issue all layoff notices by Feb. 15, according to a Dec. 15 memo issued to staff by George Brown, the hospital system’s CEO and president.

“Patient care quality and strategic growth areas are our first priority and will be spared as much as possible,” Brown wrote. “However we will examine all areas of Legacy to search for expense reduction opportunities.”

Initially, Legacy officials said they might have to lay off 400 workers. Terrett said the final number was 362 because the organization was able to “achieve a greater savings, almost $2 million more, from (cutting) fewer positions.”

In his memo to 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.”

In Clark County, Southwest Washington Medical Center — now renamed PeaceHealth Southwest Medical Center — laid off 30 of its 2,500 employees in summer 2010 as part of a larger effort to cut roughly $32 million from its $462 million budget.

Aaron Corvin: http://twitter.com/col_econ;http://on.fb.me/AaronCorvin; 360-735-4518; aaron.corvin@columbian.com