What's to blame for the layoffs at El Camino Hospital? It depends on who you ask.
Nonetheless, the future is uncertain for 195 hospital employees who were told earlier this month that they may be laid off by mid-October. In an effort to save money, the hospital announced that 140 of the 195 employees on the list would lose their jobs within 60 days of the notice, delivered Aug. 12.
Since then, comments on the Voice's Town Square forum have blamed the layoffs on hospital administration, inflexible unions and El Camino's decision to purchase the Community Hospital of Los Gatos last year.
One hospital employee who spoke with the Voice directly said she felt that the hospital could have avoided the layoffs through more prudent management and criticized the manner in which the hospital announced the cuts.
"This is the worst approach," said the woman, who asked not to be named. She said that by being vague about who would be let go, the hospital has put a cloud of doubt over the heads of its staff, which has been "horrible for morale."
"People are so paranoid right now," the woman said, explaining why she wished to remain anonymous. "Nobody trusts anybody."
The woman was critical of the hospital's board of directors voting to give a 4.7 percent raise to hospital administration last year. "It was not an appropriate thing to do," she said, noting that the raises were voted upon in the middle of the recession. "It shouldn't have even been on the table."
Judy Twitchell, a spokeswoman for the hospital, wrote in an e-mail that while other sectors of the economy were being adversely impacted by the recession last year, El Camino Hospital was not.
At that time, the hospital's publicly-elected board of directors approved a salary range, which started at $189,000 for the vice president of professional corporate and community health services, and extended to $632,640 for CEO Ken Graham. This year, the hospital board voted not to raise salaries for hospital administration.
Twitchell defended the board's decision to raise executive base salaries in 2009, writing that the increase was determined by analyzing "benchmarks from both national and local markets for tax-exempt, independent hospitals of a similar size and complexity to El Camino Hospital."
Additionally, since Graham has joined the hospital he has raised net operating revenue by about $234 million, or about 41 percent, she wrote. In 2006, when Graham took the job, the hospital reported $335 million in net operating revenue. That number was up to $569 million at the close of the hospital's 2010 fiscal year, which ended June 30.
Graham's salary is below average for non-profit hospital CEOs in the state, according to Ron Shinkman, publisher of Payers & Providers, a weekly publication covering healthcare business and policy news in California.
Shinkman, who has been writing about health care since 1993, recently completed a salary survey of more than 100 CEOs at non-profit hospitals in California. He found that CEOs at non-profit hospitals made $732,000 per year on average, including all benefits. Ken Anderson, CEO of John Muir Health, topped Shinkman's list, earning $7.45 million in 2008.
Shinkman feels that many hospitals throughout the state would do well to reconsider what it takes to retain competent, effective executives.
"Once you get over the $350,000 to $400,000 mark, you should be able to find somebody at that level that's competent to run a hospital," he said.
Shinkman said the nature of the industry, however, is such that hospital boards feel that they need to keep offering more and more money to attract top talent. "It becomes a self-fulfilling prophecy."
Yet, while he noted that some hospital CEOs take in exorbitant paychecks, slashing administrative positions and cutting back on upper management's salaries isn't a silver bullet.
Holding off on hospital expansion projects is a much bigger money saver, he said.
In April 2009, the El Camino Hospital bought the former Community Hospital of Los Gatos, renovating the facility and opening it on July 12, 2009.
The hospital employee who spoke with the Voice said she felt the money spent on the Los Gatos facility -- $103 million -- would have been more appropriately spent on the new main hospital building, which officially opened Nov. 15, 2009.
She said that by purchasing the Los Gatos campus in the midst of the recession, the hospital "overextended" itself, a problem that became clear to her in late 2009. After she moved into the new hospital building in the winter of 2009, she said she was told on numerous occasions that the hospital did not have the staff to fix problems she reported.
"They were just stretched far too thin for what needed to be done," she said.
"We stand by our decision to successfully develop El Camino Hospital Los Gatos," Twitchell wrote in her e-mail. "It was a bold decision to expand during a recession in order to reposition and strengthen our organization."
Twitchell said that after opening the facility, El Camino Hospital hired more than 450 employees, added about 400 doctors to its medical staff and said that net patient revenue increased by about 15 percent due to the addition of the Los Gatos campus.
"The acquisition has already helped, and will continue to help, both sites capitalize on the other's strengths," Twitchell said.
The health care industry has been struggling for more than a year, Shinkman said.
In April, 1,967 hospital employees nationwide were hit with mass layoffs, according to June 14 article in American Medical News, which is published by the American Medical Association.
El Camino officials said in a press release announcing the layoffs that they have seen a "sustained decrease in patient activity" due to the recession.
Chris Ernst, a spokeswoman with El Camino, 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.
"Even with the ACE improvements, we continue to see a very challenging economy," Ernst said. "It is ultimately the right business decision for the long-term health and strength of this hospital."
Among those informed that they may lose their jobs are 47 members of the hospital's nurses union and 129 members of the hospital's service workers union. Representatives from both unions -- Professional Resource for Nurses and United Healthcare Workers, respectively -- said that their bargaining units would be working hard with hospital administration in an attempt to save their members' jobs. Patricia Briggs of PRN and Lisa Hubbard of the SEIU-UHW both dismissed claims made on the Voice's website that union inflexibility led to the hospital's financial strain.
"As a publicly-owned hospital, we value the relationships we have with the unions that represent employees at El Camino Hospital," Twitchell wrote. "Although sometimes we may disagree during negotiations, our relationships are conducted in a professional manner."