Skagit Regional Health to reduce workforce to offset losses

Mount Vernon, Wash.-based Skagit Regional Health will lay off employees as it works to shore up its finances, according to a Skagit Valley Herald report.

The layoffs, which are expected to begin by the end of 2017, are part of Skagit's plans to cut 8 percent of employment costs, the report states.

Hospital administration cites the organization's multimillion-dollar revenue shortfall and other healthcare industry changes as driving factors for the move. Overall, the organization lost $4 million last year, although the organization previously experienced healthy revenue, according to Skagit CEO and President Mike Liepman. Hospital administration told the Skagit Valley Herald losses were due to reduced federal reimbursement, reduced reimbursement from the state's Certified Public Expenditure Program and a highly uncertain political environment.

However, Skagit is hopeful the employment cuts will provide improved financial footing.

"When you have good margins, the [additional funding] goes to providing for the wants and needs of the health care systems," Mr. Liepman told the Skagit Valley Herald. "We have a historical habit of succumbing to those. That's all good, but that also means we have a short vision. We think it'll be good and then in two or three years economics change and ... then it catches up to you."

Skagit did not provide an estimated number of layoffs in the report. However, hospital administration did tell the Skagit Valley Herald the organization is looking at its staffing compared to hospitals of similar size and departments within the hospitals nationwide. The report states Skagit ultimately aims to have a staff size that is "closer to the average."

Skagit CFO Tom Litaker told the Skagit Valley Herald there are departments that have already restructured. Hospital administration added the organization plans to implement some cuts by not filling positions when an employee voluntarily leaves their position, and the organization has eliminated some administrative staff positions.

"There are no protected classes here," Mr. Liepman said in the report. "Cuts will be made across the system ... I've been on the wrong end of staff reductions before. We are doing this with the utmost respect for everyone involved."


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