Of the Baker City Herald

St. Elizabeth Health Services has laid off 10 percent of its workforce the equivalent of 20 full-time workers in the past two months. Administrators also plan to shrink the hospital from its licensed 36 beds to 25 beds, a 31 percent reduction.

For a facility that lost $1 million last year and that is facing the possibility of more than $900,000 in reduced Medicare reimbursements over the next two years the cuts are necessary, but painful steps, the hospital's president and chief executive officer says.

andquot;They're fairly substantial cuts,andquot; said George Winn, andquot;and as painful as it is for us to cut staff, it's far more painful for those who are on the receiving end of the cuts. They're affected very negatively, and that's hard to live with. But we're convinced we're doing what we have to do to make ends meet.andquot;

The savings the hospital will realize because of the cuts and other revenue enhancements will just about match the million dollars the facility lost last year, he said.

andquot;The cuts were very focused,andquot; he said. andquot;They were targeted to areas where we felt we could be leaner,andquot; mostly business and clerical positions, he said.

andquot;They were great people doing a great job, but we just couldn't afford them.andquot;

A recent survey indicated that patients are generally satisfied with the level of care they received at the hospital; Winn said the recent layoffs for the most part avoided those employees who provide direct care to patients. As a result, the hospital hopes to maintain that high level of patient care, he said.

Winn is quick to dispel rumors that the hospital is closing.

andquot;I've heard that one several times around town,andquot; he said. andquot;It's blatantly untrue. There's no consideration for selling or closing the hospital.andquot;

But there is serious consideration to reducing the number of hospital beds, a move that is driven by the federal government.

The hospital hopes to be designated a Critical Access Hospital, a status that would have upped federal Medicare reimbursement last year by $329,000, according to the hospital's vice president for finance, Jeff Daniels.

Before it receives the designation, the hospital must first prove it's in a Health Professional Shortage Area, as well as demonstrate it's geographically isolated and serves a low-income population.

The second and third tests are easy enough to prove, Winn said. St. Elizabeth is more than the required 35 miles from Grande Ronde Hospital in La Grande, and the Oregon Employment Department reports that the average county wage is about two-thirds the average U.S. wage.

But a shortage of health professionals is more difficult to prove. It's not that the area is underserved by physicians there are currently 23 practicing in Baker County. But other health care slots, such as radiology technicians, have proven harder to fill.

Once it's been designated a Critical Access Hospital the hospital expects to hear one way or the other within two weeks the hospital will have to cut the number of beds it has in order to meet the federal criteria.

A 25-bed limit won't affect the patient census most days, Winn said. The average during 2002 was about 10 patients per day; only 10 days in 2002 was the census above 25.

The hospital has not been set up for its 36-bed maximum in some time. Much of the space formerly devoted to patient rooms has been remodeled for office space or for storage, he said.

andquot;This is going to work for us,andquot; Winn said of the federal designation. andquot;It's not a negative. It's a way to tap into the federal government.

andquot;The only question will be, 'What do you do when Patient Number 26 walks into your door?'andquot;

Both the board of directors and the medical staff have approved seeking the critical access status, he said. Dr. Neal Jacobson, who was treating three patients in the hospital's emergency room Monday morning, said that andquot;from what I understand, it would be good for Baker City. Whatever we can do to make this hospital viable and keep it open, we need to be doing. And if this is the most important step we can take, then this is the way to go.andquot;

Winn predicted patients would not notice the change to Critical Access Hospital status. The only reason to receive the certification as 11 other hospitals have in Oregon, all smaller than St. Elizabeth is for the money, he said.

andquot;It's a form of gamesmanship we have to play with the federal government,andquot; he said.

The earliest that the new status will go into effect is this summer, he said.

Medical facilities

St. Elizabeth has drafted a similar strategy to seek Rural Health Clinic status for its Medical Office Building. The change would make more federal money available in the form of Medicare reimbursements, Winn said although a study on how much impact it would have has not yet been completed.

Debt service on the $3.5 million facility means that the MOB currently operates at a loss, Winn said. The Rural Health Clinic designation might save the MOB from being sold, although andquot;if a buyer came along, we'd certainly entertain the offer,andquot; he said. andquot;We still need to crunch the dollars we'll receive as an RHC.andquot;

Winn said that neither the board nor the medical staff has yet signed off on the plan for the MOB.

It is the future of St. Elizabeth Care Center the hospital's nursing home that andquot;has me the most nervous,andquot; Winn said.

That's because 26 of the nursing home's 40 patients rely on state funding for their care and state budget woes might mean a reduction in reimbursement for what would be a majority of the hospital's nursing home residents.

andquot;All I've heard so far is rumors,andquot; Winn said. andquot;If the state leaves (the reimbursement level) alone, we'll be fine. Even a small reduction would be OK. But if it goes down very much, we've got a serious problem.andquot;

The nursing home is an operation that the hospital would like to grow, Winn said. It's licensed for 120 beds, and could grow to 60 andquot;overnightandquot; with the existing facility if driven by patient demand.

Any talk of change at the hospital gets the attention of Baker City Fire Chief Tim Frost. Frost said he was initially concerned when he heard about possible cutbacks in the number of beds and anthing that would affect the nursing home.

Many hospital transfers performed by the department's emergency medical technicians are reimbursed by Medicare if they're physician approved. If they're not if they're done, say, at the request of a family member the department may not be reimbursed for its time and expense. That can amount to between four and six hours to La Grande and eight hours to Boise, andquot;depending on how ready they are at each end,andquot; Frost said.

Frost said he fears that cutbacks at the local hospital could have an economic impact on his budget, which is also being negatively impacted by the current economic downswing.

andquot;If a patient at the nursing home needs to be transferred to the hospital, they are simply wheeled down the hall,andquot; Frost said. andquot;We don't want cost to be shifted from the hospital back to us. Our manpower is getting a little tight, so we want to maximize the reimbursement rate on all of our transports.andquot;

Winn said he's been asked many times why the hospital's $1.3 million birthing center is being built while employees are being laid off.

He likens the situation to the budget of a growing family that's decided to buy a bigger car and go out for dinner less often to help pay for the vehicle.

andquot;We're building the facility we need in order to serve the community the way we need to,andquot; he said. andquot;It's the full continuum of care of all our residents,andquot; from the birthing center clear through to the nursing home, he said.

andquot;We want people to feel good about coming here,andquot; he said. andquot;We're working hard to earn people's confidence, but we're doing it during a very challenging time.

andquot;Our budget woes affect everybody, but we think we're getting there.andquot;