Oregon Public Broadcasting

ILWACO — Ocean Beach Hospital and Medical Clinics will reduce the equivalent of nearly 15 staff positions by the end of February, as it weathers a financial storm of an ailing economy and state and federal budget cuts to healthcare.

The reductions will eliminate several vacant administrative positions and reassign their duties to other departments, as well as reduce staff hours in departments that have experienced lower demand for services. The reductions equate to 14.7 fulltime jobs spread across the organization and include laying off six to seven employees, according to Ocean Beach Hospital CEO Joe Devin.

“This is a difficult decision. We care deeply for our employees and value the contributions they make to our community,” Devin said. “Even though this is the right course of action to ensure we continue meeting our mission of providing quality healthcare to the citizens of South Pacific County, it is an agonizing process.”

Devin said the hospital is working closely with union representatives to minimize the impact of this restructuring and to retain as many employees as possible. The reductions will take place over the next several weeks.

The hospital has also been renegotiating contracts with vendors and is scrutinizing every area of operations in an on-going effort to lower costs and improve efficiency, he added.

In 2011, the hospital saw a decrease of 4.5 percent in the number of patients it admitted, and a 7 percent drop in emergency department visits. Devin said this reflects an industry-wide trend.

The hospital has been bracing for severe cutbacks to Medicaid and Medicare reimbursement rates that are looming on the horizon for Critical Access Hospitals, such as Ocean Beach. The Critical Access program was created in 1997 as a safety net to ensure underserved rural communities have access to quality healthcare. Hospitals with the Critical Access designation receive more favorable reimbursement rates to treat Medicare and Medicaid patients.

Under Gov. Chris Gregoire’s proposed budget, that will change. If passed by the legislature, Ocean Beach Hospital’s reimbursement rate for Medicaid services will be cut 61 percent this year, which translates to a reduction of $1.4 million. Willapa Harbor Hospital in North Pacific County will experience similar financial discomfort with a cut of just over $1 million.

These are trying economic times for healthcare organizations of all sizes across the state — small, rural hospitals like OBH, and regional medical centers in major urban areas, according to Cassie Sauer at the Washington State Hospital Association.

Sauer offered a conservative estimate of at least 1500 hospital jobs in the state that have been eliminated in just the last six months. Swedish Hospital in Seattle laid off 200 people in the fall.  Multicare in Tacoma laid off 300. Providence Health laid off 100 employees in Olympia. Legacy in Vancouver and Portland, announced last month that it would reduce staff by 400; and last week, Peace Health, in Longview, announced it would lay off 40 employees.

The recurring theme in each of these cases is a decline in patient visits, dramatic increases in uncompensated care and reduced reimbursement rates for programs such as Medicaid.

Ocean Beach Hospital is a public hospital district that employs approximately 170 people and operates three rural healthcare clinics, including the Women’s Health Center and Naselle Medical Clinic. It also offers the only fulltime oncology program in the coastal region.

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