August/Sept.
2003
Volume 27 •
No. 8
Ongoing
turnaround efforts result in staff reductions at SHC
The multiyear process to improve the financial strength of Stanford Hospital & Clinics will mean additional efforts to reduce expenses in the 2003-04 fiscal year. These steps include layoffs for 175 employees, hospital officials announced in late July.
SHC chief executive officer Martha Marsh said those being laid off will receive 60-day notices by mid-August and will receive assistance in searching for new jobs. They will also be able to apply for open positions at the hospital for which they are qualified, she added.
"Our employees are important to us and we'll do everything we can to assist those who are affected," she said. The 175 positions represent about 3 percent of the hospital's 4,800-employee workforce.
Marsh noted that the hospital's financial picture has improved considerably in the past two years. After finishing fiscal year 2001 with a $28 million loss, the hospital ended 2002 with net income of $12.5 million. Marsh said the hospital expects to be profitable again for the current fiscal year, which ends Aug. 31.
However, the hospital is also facing several cost increases associated with new regulatory requirements and the opening of the new clinical cancer center next spring. Among the regulations is a federal patient-privacy law that has created the need for additional investments in information technology, as well as a state law specifying patient-nurse staffing ratios at California hospitals. None of the 175 positions being eliminated at the hospital is in nursing, Marsh said.
"The new federal and state mandates are increasing our costs and require us to reduce costs in other areas," Marsh said.
In addition to the layoffs, the budget proposed for the 2004 fiscal year reduces travel, outside training and repair expenses to 2002 levels. Hospital officials have also worked to reduce supply costs.
Marsh noted that because of the financial difficulties the hospital has faced over the years, purchases of much-needed equipment were delayed. Those capital needs have become acute, which prompted the hospital to seek $250 million in revenue bonds in early July. The proceeds from the those bonds will be used to pay for completion of the cancer center as well as other facility and equipment needs. However, that money cannot be used for payroll expenses, she said.
"We commend everyone at the hospital for bringing Stanford to its strongest financial outlook in years, but our financial turnaround is a process that will take several years to accomplish," Marsh said.
Ongoing turnaround efforts result in staff reductions at SHC
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Sibley named new medical director of clinical labs
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