New Issaquah hospital could face layoffs
By CELESTE GRACEY
Issaquah Reporter Staff Writer
March 22, 2012 · 3:47 PM
Less than a year after Swedish Hospital Issaquah admitted its first patient, it is considering laying off staff.
The Swedish system, made up of five hospitals and more than 100 clinics, is losing $250,000 a day – and has been over the past few months.
“While we are not at a point where we need to panic, we do need to act with a sense of urgency,” wrote Kevin Brown, Swedish’s chief executive, in a letter addressing staff.
He encouraged everyone in the network to work on ways to cut expenses. So far the medical center has limited capital spending and frozen discretionary money.
However, the cuts are expected to be deeper than holding back on cash for conference travel. Management teams have begun discussing how to adjust staffing levels to match declining admittance rates.
The system has seen an 8 percent drop in patient numbers since late 2011. Brown pointed to a cocktail of problems to explain the drop, which tastes of high unemployment rates.
Fewer people have commercial healthcare, and the many that do have seen a rise in their deductibles. This uncertainty in the job market and increased cost to patients has persuaded many to hold off on medical procedures.
The system has also been affected by the rising number of people using medicaid and medicare, which Brown said doesn’t adequately pay for the cost of services.
“Swedish is not the only provider in this situation,” Brown said. “With the economy in a prolonged downturn, the public is changing the way it uses healthcare.”
While patient demand has dropped, Swedish doesn’t regret opening the new Issaquah hospital. The region is one of the fastest growing in King County, and it has a high number of residents with commercial insurance.
The hope is that as the hospital begins to fill up, it will offset the losses from those who don’t have the high-paying insurance.
Swedish also insists that Issaquah still needs a hospital, adding that the Department of Health agreed to the need when it issued a certificate for the new campus.
The medical center opened Issaquah with the expectation that it would lose money the first 18 months, and it budgeted for the losses. However, it’s still going to assess how it can turn profits quicker and reduce its losses.
Contact Issaquah Reporter Staff Writer Celeste Gracey at firstname.lastname@example.org or 425-391-0363.