Published February 2003

Facing financial troubles, Providence to lay off 350

By Sharon Salyer
Herald Writer

Providence Everett Medical Center and its Medalia medical clinics will cut 350 jobs in the next two months.

That amounts to a reduction of 11 percent of a combined work force of 3,292 employees.

The cutbacks, announced in late January, come after an estimated loss of $9.8 million for the hospital, medical clinics, and hospice-and-home-care service in 2002.

Combined, the organizations had a $333 million operating budget in 2002, said Dave Bare, chief financial officer.

The budget cuts are part of a wide-ranging cost-cutting plan that affects nearly every part of the hospital and its medical clinics.

The goal is to save $40 million this year through a combination of cuts and revenue increases, chief executive Gail Larson said.

The budget would still be $351 million.

The announced job cuts are more than twice the size of the 1996 layoffs that followed the merger of Everett’s two hospitals, when 125 jobs were slashed and the budget was cut by $11.2 million.

Earlier in January, hospital officials announced that 48 jobs would be eliminated, but budget problems caused that number to soar to 350. About half the organization’s costs come from staffing.

This year’s top-to-bottom budget shake-up includes:

• Cutting top administrative staff by about half.
• Cutting contract employees.
• Eliminating leadership retreats and conferences.
• Ending a contract where consumers could call a nurse for advice on health issues.
• Reducing sponsorship of community activities.
• Reducing hours at the hospital’s espresso stands and cafeterias.

Up to $500,000 will be saved by cuts in salary and benefits in four administrative staff who report to Larson, about $225,000 in cutting sponsorship of community activities, $400,000 by cutting a wellness program that gave employees bonuses for sticking to exercise goals, and nearly $1 million in cuts to marketing and advertising.

Although announced separately, the plan also calls for closing Medalia Medical Group’s Sultan clinic March 31, with most of the staff in Sultan moving to the Monroe office. The clinic's fate is not yet sealed, however, as Monroe's Valley General Hospital and Sultan residents look at options for keeping the doors open.

Late last year, Providence Occupational Medicine Clinic and Prevention Services, a business it opened in 1989, was sold to Bothell-based HealthForce Partners for an undisclosed amount.

All those and other steps are expected to save the hospital $30 million this year, Larson said.

“We really have to get back to what our core business is — inpatients and providing the best diagnostic services we can,” Larson said.

Conferences and leadership retreats will be severely trimmed, Larson said. Employees will no longer have company cell phones and must use their own and request reimbursement.

The hospital’s cafeteria, which used to operate until 2:30 a.m., will now close at 8 p.m. Vending machines will be installed for employees and visitors who want an evening snack.

Related: Providence left reeling from health inspection

Related: Health-care Briefs

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