| News - Friday, December 31, 2010
Ailing economy takes toll on El Camino
Hospital's financial woes show signs of improvement at year's close
by Nick Veronin
One of the last industries to feel the impact of the recession, health care fell ill in 2010, and El Camino Hospital was no exception. However, what began as a rough fiscal year for the local hospital was beginning to show signs of improvement at the start of December.
In July, the first month of the organization's fiscal year, El Camino lost $3.65 million from operations at its Mountain View and Los Gatos campuses.
To make up for falling revenues, the hospital announced in August that it would lay off 140 employees. El Camino spokeswoman Chris Ernst said the layoffs could save the hospital as much as $14 million annually, although hospital employees were not happy with the solution.
Ernst said that the hospital had been working hard through its Accelerating Continuous Excellence — or ACE — initiative to find ways to save money without cutting employees. Due to the recession, she said the hospital had seen a big drop in patient volume, as people are holding off on voluntary procedures and all but the most necessary health-related needs.
"Even with the ACE improvements, we continue to see a very challenging economy," she said. "It is ultimately the right business decision for the long-term health and strength of this hospital."
In the end, however, the vast majority of proposed layoffs were avoided, as the hospital's nursing and service workers unions were able to move most at-risk employees to different positions within the organization. Still, some employees not represented by either union did get laid off, while others represented by the nurses union decided to take buy-outs or leave.
Yet, while most nurses kept their jobs, the nurses union had another bone to pick with El Camino's administration. In a divided decision at the November board meeting, the hospital unilaterally approved a new contract with the nurses' union although outstanding issues such as paid time off, retirement benefits and pay were not resolved.
"Obviously we would prefer not to need to implement these changes," said Charlene Glinieki, chief people officer for the hospital. However, in order to meet the financial challenges the hospital is facing, "these changes are necessary," she said.
The president of the union, Pat Briggs, said that nurses were "extremely unhappy" with the decision.
Clinical trials
Financial woes did not keep the hospital from pursuing its tradition of cutting-edge medicine.
El Camino partnered with the Sunnyvale-based Parkinson's Institute on a massive, international clinical trial, sponsored by the Michael J. Fox Foundation. The study will search for biological markers of Parkinson's, a degenerative disease that causes sufferers to slowly lose control over all voluntary muscle function.
Another clinical trial focusing on early detection of lung cancer has also just begun at El Camino. The study will use a genetic test to identify smokers most at risk for lung cancer, then administer regular computerized tomography scans to those patients. If the trial goes as hoped, doctors may have a new and powerful method for detecting lung cancer early enough to save patients' lives.
Income down
In the coming fiscal year, factoring in all operational and non-operational expenditures and revenues, the hospital is budgeting an operating income of $14.3 million, down from $36.6 million last year and $71.37 million in 2008.
"We are still not at a sustainable operating income performance level," Bob Dvorak, interim chief financial officer for El Camino, wrote in an e-mail to the Voice, "but are starting to see the benefits from our ACE initiative generating positive operating income and have guarded optimism of achieving our budgeted operating income targets by the last quarter of fiscal year 2011."
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