News

El Camino layoffs draw criticism

Hospital officials respond to accusations from the community, employees

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."

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"People are so paranoid right now," the woman said, explaining why she wished to remain anonymous. "Nobody trusts anybody."

Executive compensation

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.

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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.

'Overextended'

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.

Industry struggling

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."

Unions

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."

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El Camino Hospital layoffs

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El Camino layoffs draw criticism

Hospital officials respond to accusations from the community, employees

by / Mountain View Voice

Uploaded: Wed, Aug 25, 2010, 12:58 pm

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."

Executive compensation

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.

'Overextended'

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.

Industry struggling

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."

Unions

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."

Comments

District Taxpayer
Old Mountain View
on Aug 25, 2010 at 2:14 pm
District Taxpayer, Old Mountain View
on Aug 25, 2010 at 2:14 pm
3 people like this

"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."

ECH got short-changed somewhere along the line. They should have quite a few competent somebodys with the amount of money flying out the door running the hospital.


Alan
Whisman Station
on Aug 25, 2010 at 2:52 pm
Alan, Whisman Station
on Aug 25, 2010 at 2:52 pm
3 people like this

"since Graham has joined the hospital he has raised net operating revenue by about $234 million, or about 41 percent"

Right. Because now there are two hospitals instead of one. How has operating revenue changed given an apples-to-apples comparison that excludes the new hospital?


Alan
Whisman Station
on Aug 25, 2010 at 2:57 pm
Alan, Whisman Station
on Aug 25, 2010 at 2:57 pm
3 people like this

"a salary survey of more than 100 CEOs at non-profit hospitals in California"
"As a publicly-owned hospital"

There is a difference between non-profit and publicly-owned. How do the salaries compare against other publicly-owned hospitals?


ECH district tax payer
Waverly Park
on Aug 25, 2010 at 3:22 pm
ECH district tax payer, Waverly Park
on Aug 25, 2010 at 3:22 pm
3 people like this

ECH has history of lack of fiscal discipline. The execs and Board are proud of their mantra of 'do (spend) whatever it takes.' $1 million for new hospital signs?. Multimillions for cyberknife facility - with no ROI analysis and no follow-up. Multimillions on outside consultants to do jobs that the high paid executive staff should be doing. Multimillions on inflated saalries that are justified by consultants who perpetuate the outrageous out-of-control costs in the healthcare industry. Multimillions on a bloated retirement plan that district taxpayers will have to fund for decades. Multimillions on buying Los Gatos Hospital - an unprofitable operation to begin with. The execs and the Board have had their heads in the sand for 3 years - knowing that when the interest payments on the new hospital bonds kicked in the ECH profit margin would drop to unsustainable levels. ECH is a non-profit and taxpayer supported. It should have an advantage of being the lowest cost hospital provider in the area - but with none of its programs are aimed at reducing cost - only at increasing revenues and increasing salaries. No wonder it is now operating in the red and laying off valuable employees.


reader
Waverly Park
on Aug 25, 2010 at 9:46 pm
reader, Waverly Park
on Aug 25, 2010 at 9:46 pm
3 people like this

Today at Valley Fair Mall I saw a huge banner advertising ECH hanging from the ceiling, right in the middle of the mall. Didn't see and don't recall every before having seen any banners like that. Wonder how much that cost?

And on the subject of advertising, is there anyone else that can't stand those full-page color ads showing ECH employees with those unsmiling, glum, sullen, almost angry looking expressions? Those creep me out! When I go to the doctor, or even more so a hospital, I want to be cared for by smiling, happy, warm, approachable looking health care providers!


Grateful Patient of ECH
Waverly Park
on Aug 25, 2010 at 10:17 pm
Grateful Patient of ECH, Waverly Park
on Aug 25, 2010 at 10:17 pm
3 people like this

El Camino Hospital in Mountain View has bee a wonderful resource for our communities. The present situation is an indication of the failing economy and until recently this was never a problem. As the economy falters, healthcare costs rise. It is terrible for anyone to loose their jobs, but practically every hospital in the Bay area is in the same situation as ECH trying to cut costs in order to function with the best of care. The purchase of ECH Los Gatos has provided residents of the South Bay with impressive care and is functioning in the Black after just one year in operation. ECH has been praised as the most savvy technologically functioning hospital in California. To be critical of the CEO and the Board is putting blame in the wrong place. For the patients who have had the benefit of the latest advances in healthcare, ECH has been a very caring Hospital. I know first hand and so do many others.


Not A Graham Fan
Willowgate
on Aug 26, 2010 at 7:10 am
Not A Graham Fan, Willowgate
on Aug 26, 2010 at 7:10 am
3 people like this

Grateful Patient, I am glad you had a good patient experience. That was brought to you by excellent care providers; care providers who may lose their jobs due to fiscal irresponsibility. It is perfectly acceptable to place the blame squarely on the shoulders of Mr. Graham, his direct reports and the board on overspending, when it was not necessary to do so at this particular time.

The fact El Camino had money in the bank due to savvy planning of the previous CFO when other hospitals did not due to timing and a recession did not mean they had to spend it all because it was burning a hole in their pockets. It also did not mean they should be rewarding themselves for future unforeseen profits by giving themselves raises because they moved most of the Mountain View Hospital into the new building (by the way not all departments fit into the new facility and some were forgotten in the planning, or were bumped out by more executives and conference rooms, so they were left behind)so there are two hospitals in Mountain View; they flipped and reopened an old hospital which will still need considerable money to retrofit in the future - so don't close your wallets yet!

Yes, Los Gatos is a valuable resource and is in the black after a year of operation, but remember it took MILLIONS of dollars from MOUNTAIN VIEW spent to get them to that position and now the markets are all dead due to the recession.

The degree of Mr. Graham's as well as his staffs feelings of 'entitlement' is glaringly apparent and needs to stop; the board needs to step up and pull in the reigns, take away the checkbook and evaluate the volume of money being spent on the parade of consultants who are running the hospital.


me again
Castro City
on Aug 26, 2010 at 10:59 am
me again, Castro City
on Aug 26, 2010 at 10:59 am
3 people like this

What about all the money that the EC hospital spent on a "day worker center"? What's up with that? A promotion of ILLEGAL immigration using our tax money?
The layed off medical professionals can get jobs as construction workers maybe?


"Just Think About It"
Cuesta Park
on Aug 26, 2010 at 1:26 pm
"Just Think About It", Cuesta Park
on Aug 26, 2010 at 1:26 pm
3 people like this

If it is true that ECH is spent my tax dollars on a "day worker center" I believe the District Attorney should look at this and if any laws have been violated prosecute whoever is responsible to the full extent of the law. I didn't vote to have may tax dollars spent in that manner............"Just Think About It"...................


.
another community
on Aug 26, 2010 at 4:46 pm
., another community
on Aug 26, 2010 at 4:46 pm
3 people like this

"Me Again" if your talking about the Rotacare Clinic at ECH (Web Link) your ignorance is offensive. Im curious as to what "all that money" actually refers to.


Me again
Castro City
on Aug 26, 2010 at 6:10 pm
Me again, Castro City
on Aug 26, 2010 at 6:10 pm
3 people like this

No, anonymous, I was not referring to the Rotacare clinic.
Also, I somewhat resent being called ignorant (flame wars are so yesterday) and I do not intend any offense.
In 1996, El Camino Hospital started a program to move "day workers" off the street and into an employment office. Local businesses were complaining of men urinating in the parking lot and leaving behind empty bottles of intoxicating distilled beverages.
If you would like to experience "day workers", visit Home Depot in Sunnyvale, any day of the week in a pickup truck. You will be swarmed by skilled construction workers looking for employment.


oh please
another community
on Aug 26, 2010 at 11:01 pm
oh please, another community
on Aug 26, 2010 at 11:01 pm
3 people like this

Dragging the Day Worker Center and immigrants into a conversation on an entirely unrelated subject?

THAT is so yesterday!

1. ECH does not fund the worker center. Get your facts straight.

2. Stay on the subject. "El Camino lay-offs" in case you've forgotten.


me again
Castro City
on Aug 27, 2010 at 6:11 am
me again, Castro City
on Aug 27, 2010 at 6:11 am
3 people like this

See:
Web Link

"The (day worker) center was started in 1996, with the financial help of El Camino Hospital, to deal with the day-worker dilemma."

Why was the hospital spending money a day worker center when it should be concerned with health care? If the hospital used its financial resources for health care related items, it would not be facing layoffs.


Get Your Civic Duty On
Old Mountain View
on Aug 27, 2010 at 11:22 am
Get Your Civic Duty On, Old Mountain View
on Aug 27, 2010 at 11:22 am
3 people like this

The next board meeting is set for September 8th at 5:30pm. If you are a taxpayer you should attend to hear what the hospital has to say.


Thom
Jackson Park
on Aug 27, 2010 at 5:11 pm
Thom, Jackson Park
on Aug 27, 2010 at 5:11 pm
3 people like this

This is no different than any other corporate layoff. Things happen, people move on, and your service cannot possibly get worse.


ECH Nurse
another community
on Aug 28, 2010 at 8:41 pm
ECH Nurse, another community
on Aug 28, 2010 at 8:41 pm
3 people like this

I feel sorry for patients and staff. The most valuable people are being cut. The staff who are left are being made to do things like ration linen to save money. Morale is tanking, staff is overworked and I am sure management is still taking great vacations. Staff are taking the hit for hospital mismanagement.


waiting for the other shoe to drop
Cuesta Park
on Aug 29, 2010 at 8:00 pm
waiting for the other shoe to drop, Cuesta Park
on Aug 29, 2010 at 8:00 pm
3 people like this

I wish the robots mentioned in the press in other publications would replace the HR department; so maybe those on the list could get answers to benefits or packages or anything. Better still, maybe the robots can just come over and replace the management and we could just start over.


Nick
another community
on Sep 1, 2010 at 12:05 pm
Nick, another community
on Sep 1, 2010 at 12:05 pm
3 people like this

Yes, all those millions from 1996 for the day labor center is what caused the crisis. Give me a break.


Lynn Huidekoper, RN
another community
on Sep 2, 2010 at 9:55 pm
Lynn Huidekoper, RN, another community
on Sep 2, 2010 at 9:55 pm
3 people like this

I am an RN who has worked for 40 years. What is happening at ECH is the same thing that happened at San Jose Hospital several years ago, a hospital of the for-profit Hosp. Corporation of America chain, where they gave the patients and employees a 90-day notice.

HCA used to be Columbia-HCA and Rick Scott was the Columbia CEO. He was corrupt and they were levied more than a $1.7 billion fine for Medicare fraud and kickbacks at their hospitals in Florida (and possibly Texas), the largest fraud settlement in US history. Rick Scott was fired but never prosecuted. Ironically,he just won the Republican primary for the US Senate in Florida. Greed again trumping pt. care.
I am sure that HCA closed San Jose Hospital, the only hospital downtown, which served the poor, because they went over-budget on the construction of the new maternity wing of Good Samaritan. The elevators in it look like the Fairmont Hotel! They also stopped caring for Medi-Cal pts. at their other 2 hospitals.

They placed a full page ad in the Mercury News blaming the RN salaries on the closure. They didn't care if all their staff had to scramble for jobs. Fortunately, they had unions like CNA and other unions, to find positions at the other 2 hospitals, so they could keep their seniority. However, the newly hired staff at the other 2 hospitals could be bumped by those with more seniority which led to much bitterness and decreased morale.
Looks like ECH management is trying to pull the same stunt-blaming the unions. It's amazing how people in high places can tell so many lies.
Yet another example of corporate greed and mismanagement affecting the very folks who care for the patients. These CEO salaries are obscene. No different than the health insurance CEO's who make profits off of the sick while denying care.
The ECH patients should be up in arms for the proposed layoffs. How can profits be more important than employees? A hospital's staff is much more valuable than fancy equipment and rooms.
What has this country come to where layoffs happen on a daily basis while those who lay them off are making loads of money and keep their jobs? No different from Carly Fiorina getting a $120 million package when she was fired after laying off 30,000 HP employees and shipping their jobs off to China.


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