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St. Charles Health System cuts workforce by 181 positions amid mounting financial challenges, operating losses

(Update: Adding comments from media briefing)

Despite move, 'will still end 2022 with a substantial operating loss'

 BEND, Ore. (KTVZ) -- Faced with skyrocketing contract labor, equipment and supply costs — and flat revenue — St. Charles Health System leadership announced Wednesday it "has made the difficult decision to reduce its workforce" by more than 180 people.

The reduction will impact 105 caregivers through layoffs. An additional 76 positions that are currently vacant have also been eliminated, the four-hospital system said in a news release, which continues below:  

The 105 layoffs — which will take place over the next three days — are targeted to mostly non-clinical areas where the organization found through a benchmark data review process that it has more staff than other health systems of a similar size.  

“For the past two years, our caregivers have taken on and conquered unprecedented challenges to care for our community, which is why it feels particularly unfair that we now find ourselves in this position,” said St. Charles President and CEO Joe Sluka. “While our financial situation isn’t unlike many other health systems around the country, this decision hurts. These are our people.”   

Even after taking aggressive steps to address its current financial challenges, which have included both reducing expenses and identifying revenue improvement opportunities, the health system said it has "hemorrhaged $21.8 million through April. Year to date, St. Charles is facing a 6.7% operating loss." 

The organization’s expenses and revenue began deteriorating in the spring of 2020, when its contract labor, equipment and supply costs began to soar at the same time it was forced to significantly reduce the number of surgeries it performed due to pandemic-related restrictions and the need to preserve bed capacity to care for critically ill COVID-19 patients.

This imbalance persisted through 2021 as St. Charles experienced three significant surges of COVID-19 patients — at times operating up to 107% of its capacity — making it difficult to resume its pre-pandemic level of surgeries and other services.

Further compounding St. Charles’ financial stress is the repayment of the more than $95 million in federal funds it received over the last two years to support its operations, the hospital system said. 

Though the workforce changes the health system is making this week are projected to reduce its expenses by approximately $20 million annually, St. Charles said it will still end 2022 with a substantial operating loss. With a sustained focus on improving the efficiency of its operations, the organization is working toward achieving a positive operating margin by the end of 2023 or early in 2024.  

“It has taken two long years of the pandemic to get us into this situation,” Sluka said, “and it will take at least two years for us to get out of it. But we will. And we will continue to take excellent care of our community now and in the future.” 

The workforce reductions represent about 4% of the total at St. Charles, the region's largest employer, which had just over 4,500 employees in this year's ranking of the region's largest private employers from Economic Development for Central Oregon, though that was a reduction from the 2021 total of 4,626 caregivers.

During a media briefing with hospital officials, Rebecca Berry, vice president of human resources, said they are "definitely still hiring" for other open positions, especially nurses and technical staff for acute-care needs and the operating room. She estimated about 400 openings remain to fill, after the reductions.

Asked by NewsChannel 21 if more cuts are likely or possible, Sluka said, "Despite all of our best efforts to reduce expenses, as you can see, our costs have continued to accelerate. And we will take more cost-cutting measures over time.

"We are hopeful that the impact to our caregivers is something we will not have to resort to again. But we can never say never on that. ... At this point, there is nothing being planned or nothing on the table, and we hope we don't have to resort to this again."

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Sluka also sent out the following email message Wednesday, entitled "Difficult times, difficult decisions":

Over the past two years, St. Charles caregivers have worked tirelessly to care for the people of Central Oregon when they needed it most: during a global pandemic – a public health crisis unprecedented in our lifetime.

They turned a parking lot into a COVID-19 testing site.

They converted an empty conference room into a community vaccine clinic.

They’ve taken care of the sickest COVID-19 patients in our hospitals and provided the latest treatments at our clinics.

Along the way, St. Charles – with support from the community – did everything we could to take care of our caregivers, so that they could take care of you.

All of that, of course, came at a price:

  • Our labor costs have skyrocketed, largely due to our need to bring in expensive contract clinical staff from other areas of the country to help us meet the community’s needs.
  • Equipment and supply costs have also increased, as they have in every industry.
  • Our surgery volumes have been down for two years, which means significantly decreased revenues.
  • Last but not least, we are now paying back federal pandemic relief funds to the tune of more than $1 million every week.

We’ve been working hard to reduce expenses for a few months, and those efforts have helped. But they are not enough to dig us out of this financial hole. We ended the month of April with a $21.8 million loss.

We are now at the point where we have to take additional action to ensure the long-term financial stability of the health system.

It pains me to tell you that we must reduce our workforce this week. We are eliminating 76 positions that were already vacant, but that isn’t enough. We are also reducing 105 positions that will result in layoffs.

First and foremost, that is not just a number. Those are our colleagues and our friends. We are grateful to them for their dedication to our community and we are saddened to see them go.

Over the past few weeks, we have gone through a thorough process in which we compared every area of our organization to industry benchmark standards.

Where we are out of line with those standards, we must make changes. In particular, many leadership positions are being eliminated to bring our structures into alignment with other health systems of our size.

These reductions are projected to reduce expenses by more than $20 million annually.

Still, we will likely end 2022 in the red. It has taken us two pandemic years to get us into this situation, and it will take at least two years for us to recover. And sadly, we are not alone. Organizations across Oregon and the country are facing similar financial challenges.

To the communities we serve, I want to reassure you of a few things:

  • We have a responsibility to ensure our community has access to high-quality health care and are focusing these reductions in mostly non-clinical areas to minimize the impact on patients.
  • We are still recruiting and hiring new caregivers to rebuild our workforce and reduce our need for expensive contract labor.
  • We are reviewing all of our service lines to ensure they are financially sustainable, which could result in additional changes.

While these decisions are incredibly difficult, we are making them because we are committed to becoming a more efficient health system that is well-equipped to continue what we’ve done for the past 104 years: Care for the people of Central Oregon.

As always, we greatly appreciate your support.

Sincerely,
Joe 

KTVZ news sources

Comments

86 Comments

    1. I don’t blame you. Oregon is way too expensive. As soon as I sell my house I’m leaving too and we have been here since the mid 80s when Bend was charming. This isn’t the only place on earth…..

    2. A lot of people are following lead. Oregon has become overpriced. Bend…..we loved it to death. These liberals can buy my house for 4 times the amount I bought it and suffer when the housing crash happens.

  1. This is sad to hear. As Central Oregon is exploding Doctors & staff cannot keep up then to hear they’re cutting staff. My thought is whoever runs St Charles got to big for their britches. They had to buy up all the Central Oregon hospitals for one thing then as example the Prineville hospital is a total waste of space, laid out so stupid. It only has 16 beds and to look at that building u would think it had 100.
    Sorry people are losing their jobs

  2. It’s Putin’s layoffs. You have seen nothing yet, this country is being driven into the ground and it’s everybody else’s fault. Craigs List is going to have a lot of stuff for sale soon.

      1. 4 years ago magas were glad putin was running the teleprompter but now its a bad thing instead lol… Lesson one- Also put trump on that horse topless wearing camo hotpants and he would have no trouble winning a general election (for once)
        🤣🥳🤠🔨🔨🔨🌙🌙🌙

  3. It’s really sad that they announce this to the public and keep all of their employees in suspense… It must be miserable not knowing if you are gonna have a job next week or not. My heart goes out to all of the employees at St.Charles right now that are on edge.

    I have lost a LOT of respect for the hospital over the years but this is a new low… Good job St.Charles. Good job.

    1. There are 11 executives. Talk about bloat. Is that many executives really necessary to run a health system of its size? But let’s get rid of the employees that make a fraction of what they do.

      Maybe Joe and the rest of the executive team should take a pay cut or maybe not take a bonus…. there’s a good place to start.

      1. You nailed it on the head! I worked there for almost a decade and the biggest disease in that hospital is the upper management. Seven figure salaries and six figure bonuses, meanwhile the actual caregivers are some of the lowest paid in the state and worked to death. If they want to start cutting positions for financial reason, they need to start with Sluka and work their way down from there.

    2. “In particular, many leadership positions are being eliminated to bring our structures into alignment with other health systems of our size.”

  4. I’m shocked, shocked I tell you. Last year, when the union squeezed big pay increases out of the hospital, I knew the other shoe would drop soon. It took a bit longer than I anticipated, but the remaining union members can now wave bub bye to their friends walking out the front door with their cardboard boxes. But, they will still have a job, so tough luck for their fellow union members. btw I was in a St. Charles clinic office yesterday. I was the only patient in the waiting room, and I got to see the doctor 5 minutes early! The four or five other staff were just kind of hanging out with not much to do. Not sure why this small clinic operates the way it does with so many staff for such a small office. Seemed like a very inefficient business model.

  5. They’ll use more Rona money to float their executives large salaries and bonuses. Bidens idiot in charge is already asking for more funding. Question is where’s the money coming from? The United States is now broke thanks to the dems rona scare tactics. Planned for sure. They want every country ran by the WHO and the Globalists.

      1. Just as it should be. We cate more for other countries citizens over our own as evidenced by looking around. Trump had it right “America First” which I whole heartedly agree with because if we can’t fix ourselves first there is no way we can help anyone. Throwing our money to foreign countries is not the way to do it.

          1. President Trump not only created the best economy our nation has seen in decades- but Biden is proving to be a complete novice (like you) when it comes to understanding the basic principles of economics… what business do you own/operate anyway… I’ll bet you don’t !

  6. Now report how many MILLIONS Sluka the sucka has made over the last 3 years. He needs to take a big pay cut, like fired. Also, I didn’t see it reported that the majority of crisis staff (Rn’s, Cna’s, rt’s, etc) were paid for by the federal government under emergency. St. Chucks had 2 years of free labor!!!! Where did all that money go? Hope another hospital takes over. I feel bad for all the employees that were coerced into taking the vaxx that is not fda approved only to be cut anyway. What terrible leadership, other hospitals run way better and staff actually are respected.

      1. Well they don’t because fully vaxxed get and spread covid and St. Charles let’s employees work with positive covid tests. Also, since we know science has proven that immunity wanes with the vaxx, why are employees required to get boosters or get fired? You should be super upset.

      2. And no, the vast majority of hospitals in Oregon allow religious/medical exemptions and let you work. Do some research before posting dumb comments. BTW been making 3 times what I’ve made at st Charles working in other oregon hospitals. It’s refreshing, totally different culture. Management actually cares about staff.

  7. This is a grotesque move on the behalf of SCMC. They have forgotten who Saint Charles is and what he stood for. Sad. I challenge the higher paid staff there to research and rethink this decision. Maybe cut pay and bonuses for the top 5% and leave the caregivers alone for the sake of our community! I mean weren’t you just begging folks online and tv to go work for you? How embarrassing. Those pretty little advertisements aren’t cheap either. I would fire your whole marketing and legal team’s first then review and revise the top salaries and bonus before letting go anyone that makes an hourly wage! KTVZ should be asking for a salary and bonus list. Show us so we can hold them accountable! Imo we need another hospital to compete w SCMC. This will keep them fiscally honest and accountable to the community they serve. Sorry to those loosing their jobs in 3days.

  8. It’s insane that our healthcare system’s primary goal is to make money. Imagine if the primary goal of the US military were to make money, what that would look like.

    Some things require non-monetary goals.

    1. Beej ~ the folks who get military contracts make ridiculous money. And the US defense budget? Not lacking. Pity all of the WPM politicians don’t allocate more to education instead of their war games.

    2. Beats socialized medicine. Socialized medicine is a nightmare. Had an aunt that experienced it and people couldn’t get surgery scheduled even if crucial. Poor care, no choice of doctors. No thanks.

    3. Healthcare is a product just like paper and food. There is nothing in the constitution that guarantees you the right to healthcare. They have a right to make a profit. Maybe people should take better care of themselves so they need less healthcare.

  9. Rumor has it that SCHS is $8m in debt. The top execs ~ $750k per last I heard. Plus benefits. Why!?

    A place for healing ~ not even close.

    Back in 2012 they flunked the grading system but due to being the only medical facility in the region they were allowed to continue to operate. And pay ridiculous compensation packages for the higher ups.

    1. From 2020 “in 2017, Sluka took home $1.12 million in compensation, according to the hospital’s 990 IRS form. Total executive pay for that period totals more than $6 million.” WE WANT TO KNOW HOW MANY MILLIONS SLUKA HAS TAKEN IN SINCE 2017!!! Him crying about the hospital system being broke is kind of funny considering last summer they cancelled elective surgeries until December due to staffing not covid. Then they fire the non vaxxed and now fire more staff. Guess who needs to be fired? JOE SLUKA the SUCKA.In 2017, Sluka took home $1.12 million in compensation, according to the hospital’s 990 IRS form. Total executive pay for that period totals more than $6 million.

    1. I just had a procedure done at the NEW Bend Surgery Center , a very impressive medical facility with awesome staff and surgeons. I can’t say enough good things about it and I am hoping all my procedures will be done there.

      1. Yes it’s a great place for many surgeries however SCMC still has the monopoly on the most complicated and critical surgeries. Until another actual hospital is located here SCMC will continue to run with a bunch of thieving managers like Sluka and blame the high costs of operating on the workers. I’m glad I retired from there in 2016. BTW, those who will be laid off will be escorted out by security. That’s what they do at SCMC when they do to their laid off employees. It’s terrible!

        1. Remember how they treated the LPN’s when they decided to changed their nursing structure? Treated like criminals when they came to work and escorted out with no warning. Disgusting.

  10. Don’t blame it on the management. They were slammed with all kinds of extra expenses related to Covid. I’m sure it is a nationwide issue. I just hope if any one of you gets Covid you get the care you need.

    1. Many commenters want a convenient scapegoat, and being anti-management is very fashionable. These same commenters obviously never studied math or business administration. If they had, they would know that saving a million dollars or two reducing management and compensation would have almost no effect on shortfalls of ten’s of millions. This is not just a Bend problem, hospitals throughout the country are suffering, and sometimes closing these days. Now, I do think there might be some truth to the claim that some of St. Charles’ problems are a result of overreaching, building new facilities and spreading out over the region. By doing that, they not only incurred capital expenditures, but ongoing staffing and other costs, that is just not bringing in the revenue predicted. Shutting down LaPine, Prineville, even Redmond facilities is probably the best cost-saving approach, but would get so much local pushback, that it is not in the cards now, at least.

    2. You clearly don’t work there or have family that does. Management IS the problem! If you can make a LinkedIn profile and fill it full of BS you too can be apart of the Management team!

  11. Don’t be so surprised. The sentinel event capitol of Oregon has had financial and associated quality of care issues for years. We should hope Legacy or Providence system will buy them out.

  12. Worried about paying back $95 million dollars to the government how about babbling Biden help his Democrat run state and shave off some of that $40 billion for Ukraine to help keep 181 people employed!!!

  13. So this winter when Covid comes back and the news says “healthcare providers are running out of staff to keep up with the surge, know the real reason why.”

  14. Hey Joe, step down. Take the majority of the “nurse managers” and “managers” with you. Hire, retain, and pay local nurses on par with what you pay travelers. Pay your providers. Have doctors/nurses fill the admin/exec position on a rotating basis with stipend. “Joe” and those like “Joe” are the problem.

  15. How about bringing back some excellent highly qualified nurses who lost their jobs because of not taking the jab. Big bucks paid for travelers who some were questionable. The real evidence about these shots and needing boosters every 3 months is out. I don’t think staff are going to keep falling for this mandate so they may not have to lay off people.

  16. They need to show enough loss fast enough to declare bankruptcy so as to mitigate the damage that’s coming when nurses lawsuits for wrongful termination get litigated. The SCMC abuse of employees and poor service of the community needs competition. I for one hope thier currupt system goes under and replaced by better. But not before all of us who were wronged get our dues.

      1. I hope the lawsuit makes Sluka feel it yes. However, at this point I also hope all the vax idiots on here who were wishing ill toward people who wanted autonomy over thier health, all the “don’t let the door hit ya” crowd, everyone saying we weren’t qualified and stupid, all who kept saying we wouldn’t be missed but just replaced… I hope they’re getting the picture. Ya miss us yet? I said it a year ago; don’t get sick or hurt. You in there Martha, Bablaugh, Keyser? No? Crickets? To all on you vax fanatics; wish granted, enjoy!

  17. Today hard working hourly wage workers that keep that place running lost their jobs. While there is an abundance of “Leads” and Manegers still employed who have no idea what they are doing running the place into the ground. Curious how they only fired non union workers… St. Charles is the most toxic work place in Central Oregon hands down!

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