Just two months after significant layoffs, Palm Drive Hospital in Sebastopol is bracing for yet another round of staff reductions that could fundamentally alter operations and services at the financially strapped facility.
Hospital management has already begun looking at the viability of such medical services as wound care, spine surgery and joint replacement in an effort to stem the monthly revenue losses, which officials said totaled $356,200 in January, and more than $1,020,368 thus far for the current fiscal year, which ends July 1.
"I don't think any small hospital with the level of volume as low as ours will be able to survive long term without significant additional funding sources," Thomas Harlan, Palm Drive's CEO, said Saturday. "If we were to eliminate any one of those programs, we would be eliminating staff."
"If we can't sustain it as it is right now, we have to re-imagine and re-emerge as something else," he said.
The cuts at Palm Drive come as hospitals around the North Coast grapple with smaller Medicare payments, fewer overnight patients and competition that is expected to get tougher later this year when Sutter Medical Center takes the wraps off a new hospital in Santa Rosa.
On Friday, management held several meetings with hospital staff and notified them of the possible layoffs. The notification complied with the state Worker Adjustment and Retraining Notification Act (WARN), which requires companies to notify employees and the state 60 days before mass layoffs of at least 50 people at a particular work site.
One Palm Drive employee, who asked that her name not be published, said she was upset that the hospital has not come forward sooner with the dire financial news.
"As a Sebastopol resident who supports this hospital, I find it appalling that they haven't brought it to the public's attention so they could get some feedback and ideas from the public as to what they could do to turn the place around," the employee said.
Officials said that the Palm Drive board is expected to hold a special meeting sometime this week. Such a meeting would require at least 24 hours public notification, so the earliest the meeting could be held is Tuesday after notification on Monday.
The written notification, which Harlan wrote and received himself, was sent to all 242 employees telling them that, "we anticipate that we will lay off at least 50 employees at Palm Drive, the layoff is expected to be permanent."
Harlan said the notification was a legal requirement and that the figure of 50 positions is by no means firm. The final number of layoffs could be fewer, or more, depending on what services are eliminated and what structural changes are made at the hospital.
"We have been looking at various scenarios for several weeks," said Harlan. "There has been no final decision as to what we're going to do. The board needs to make that final decision."
In January, the hospital implemented layoffs or reduced work schedules that affected 40 people. The move resulted in 10 layoffs, and the number of hours saved equaled about 20 full-time positions, Harlan said Saturday.
But continued financial hemorrhaging is forcing more drastic measures, officials said.
While the hospital has 37 licensed beds, it has long been staffed at far fewer because of a continued decline in its inpatient volume. Last fall, management reduced staffing from 18 beds to 14.