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PeaceHealth looks to save another $30 million

Health care provider faces largest budget gap in recent memory

The Columbian
Published: July 16, 2013, 5:00pm

Vancouver-based PeaceHealth is asking employees across its three-state system to help it come up with ways in the next two months to save $30 million — on top of $100 million in savings it already has identified internally — as it faces the “largest budget gap in recent memory,” according to Alan Yordy, PeaceHealth’s president and chief mission officer.

As part of the plans to cut costs, PeaceHealth is suspending hiring immediately for open positions and is reviewing them on a case-by-case basis, Yordy said. It is also reviewing all vacant positions to decide whether positions can be consolidated, cut to part time or if there are other options.

PeaceHealth employs about 16,000 people systemwide in Washington, Oregon and Alaska, and has about 900 vacancies, according to Peter Adler, PeaceHealth’s senior vice president/chief strategy officer. Adler added that priority would be given to positions that involve direct patient care.

Yordy did not rule out layoffs but said: “Our first priority is to minimize workforce reductions through responsible hiring practices, staffing and avoidance of unnecessary pay practices such as overtime pay.”

Voluntary unpaid furloughs and early retirement options also are being discussed, he said, and travel will be curtailed unless it is “absolutely essential” and pre-approved.

Yordy made his comments in a presentation prepared for PeaceHealth employees being delivered this week. The Register-Guard obtained a copy of his presentation.

The latest belt-tightening is a continuation of efforts PeaceHealth has made since the onset of the recession about six years ago to trim expenses and boost revenue.

“While budgeting is never easy, this year we are facing challenges that are unprecedented in recent memory,” Yordy said.

The nonprofit has identified about $100 million in savings “in network and shared-services operational improvement plans” for the fiscal year that started July 1, Yordy said.

In addition to looking for places to save money by cutting, PeaceHealth also is looking for ways to increase revenue, Adler said.

These include “a whole lot of initiatives from smaller to larger,” Adler said, including improving billing of insurance companies in order to get the money faster.

Yordy emphasized in his prepared remarks that the $100 million in savings “have been identified but not yet realized.”

“If we don’t achieve the full $100 million in identified savings, then the difference will be added to the $30 million goal; the total savings must reach $130 million,” he said.