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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.”
Hog Wash! Had the administrative staff provided better leadership starting three-four years prior to the economic meltdown, the shortage of money in 2010 would not have happened. Building the Taj Mahal with freeway width hallways, piano playing entertainment and a variety of other mis-steps along the way, lay-offs and benefit reductions could have been avoided. It is great PR maneuver on the part of the hopsital to credit the economy with their negative cash flow but employees know the difference. Purchasing Lost Gatos to supplement the ECH campus money pit was probably not a great decision either. I think the community needs to wake up and realize that the failures in their beloved community hosptial are being bailed out by decisive consultants who have advised the cut-backs because the CEO (who makes a LOT of money) neither saw the mistakes nor did he take responsibility for errors of the last 3-4 years. His admin team knows it but they are loyal to a fault. Remember Enron and the top dogs supporting each other? Need I say more……….wake up people! It’s your tax dollars and insurance payments that are footing the bill for this boner!
Here! Here! Thank goodness the economy tanked in 2008 so the administration could have something to blame their miscalculations on, eh?
I love having a beautiful, state of the art, world class hospital to go to. I have mixed feelings about the hospital board and the management and the way they have handled things. I don’t know it all, but it seems they have gone out on a limb to give us their idea of a good medical experience and in the quest their employees have paid a great price. Almost all of them are affected in a negetive way. If they weren’t laid off, didn’t retire, or move to another less desirable job, then it is likely they took some sort of schedule reduction that puts less money in their pocket and makes them, like so many, worry about how to pay their bills. It is another example of how our businesses are run in this country and it may or may not work out. I hope our shiny new hospital does so well that they can give the employees a better deal as they are always taking good care of their patients with a great atitude and excellent service.
We got the fancy new hospital and it comes on the backs of the people working there as they don’t get the benefits from it that we do. We all need to support them and the hospital, use it when the need arises and be thankful when we have the ability to get their care as we probably have better benefits than they do. If we stay loyal to the hospital it will benefit everyone, the patients, the employees and all of us in the communities it serves.
I think the community needs to know WHO IN THE HELL thought a 1 Million dollar chandelier was a smart thing to spend much needed funds on?
Ask Dr Curatola who was Chairmain of the Board at the time and oversaw the budgeting and planning of the new hospital. We are still paying the price for the old gaurd “vision”.