| |
1st
appeared 5 April 1999
UCSF Stanford to Lay Off 800 Employees
About 800 UCSF Stanford Health Care employees will be laid off over the next few months as
the organization attempts to cut $170 million from their $1.5 billion annual operating
budget.
The layoffs will come as part of an initial reduction of 1,275 full-time equivalent
positions, according to UCSF Stanford. Another 725 positions will be identified for
reduction during the next few months. When the process is complete, UCSF Stanford expects
to cut 16 percent of its workforce of about 12,500 employees at sites in San Francisco and
Palo Alto.
"These are extraordinarily painful decisions for all of us," wrote Chief
Executive Officer Peter Van Etten in a March 29 letter to employees. "But I feel
strongly that we have no other choice."
Administrators first warned managers in February that workforce reductions would be
necessary to balance the budget, after posting a surprising $10.7 million loss for the
first quarter of this fiscal year. Second-quarter financial figures are not much better,
according to Bruce Schroffel, senior vice president and chief operating officer of patient
care operations at UCSF.
"Our goal is to first break even and then to achieve an operating margin so that we
can continue to invest in capital needs and program development," said Schroffel.
UCSF Stanford's financial problems are due to a multitude of factors, including declining
government reimbursements for the care of Medi-Cal and Medicare recipients, who make up
half of UCSF Stanford's patients, and increasing costs of drugs and other medical
supplies. Operating in an intensely competitive managed care market, UCSF Stanford also
receives payments from private insurers and health maintenance organizations (HMOs) that
do not keep pace with rising costs.
Reducing the Workforce
In deciding how to reduce costs, UCSF Stanford used industry benchmarks to compare its
departmental workloads and staffing levels with other academic medical centers and is now
attempting to bring staffing levels on par with the most cost-effective academic medical
centers across the country.
UCSF Stanford is looking "first at non-essential open positions, attrition and the
elimination of temporary jobs to meet our reduction targets," Van Etten said.
"We will do all we can to minimize the number of people that we have to let go."
Without any final figures, Schroffel said he expects that the number of layoffs of UCSF
employees who are leased to UCSF Stanford will be in proportion to the rest of the
employee population. (UCSF leases about 1,000 employees to UCSF Stanford in an agreement
reached prior to the merger to protect the retirement benefits of longtime University
employees.) However, in making layoff decisions, seniority will be considered along with
other criteria, said Schroffel.
"In making decisions about how to reduce costs, our priority has been maintaining our
ability to provide the highest quality care to our patients," said Van Etten.
Central administrative services such as finance, strategic development, information
technology and human resources will have the largest number of layoffs -- it is estimated
that these positions will be reduced by about 40 percent. Hospital support staff will be
cut by about 28 percent; direct patient care staff by about 9 percent; and diagnostic
services staff in areas such as X-ray and lab services by about 8 percent, according to
Van Etten.
Senior management positions have been among the first targeted. "We're down to only
three-and-a-half full-time vice presidents to run two hospitals," Schroffel said of
the team that manages UCSF and UCSF/Mount Zion medical centers. "We're down to a
small, efficient group."
UCSF and Stanford adult services will see a combined total of about 160 layoffs, according
to Schroffel. The combined children's services will lose about 13 employees working in
various positions.
UCSF Stanford will provide all affected employees with 30 days notice as well as severance
pay based on years of service to UCSF Stanford or the parent organizations, unless
otherwise specified by a union contract. UCSF Stanford will also provide career counseling
and a two-day career transition workshop for all affected employees that includes help
looking for a new job, preparing for interviews and writing resumes. On-site job fairs and
career and personal counseling will also be available, Van Etten noted.
Combined reductions in labor expenses alone account for $112 million toward recouping the
$170 million budget shortfall. The balance will come from cutting $38 million in expenses
for supplies and clinical resource management, plus $20 million from miscellaneous
expenses such as travel, recruitment and consulting fees.
Links:
UCSF Stanford Health Care
Budget Plan Calls for
$170 Million Reduction in Expenses (UCSF Stanford press release)
Related Daybreak stories:
Merger Compounded -- but
Did Not Cause -- Current Campus Stresses,Says Debas
UCSF Stanford Health Care
Faces Fiscal Challenges
Source: Lisa Cisneros, Newsbreak
editor |
