Trios Health is taking steps to improve its troubled financial position, including making staffing cuts.
The target is to reduce enough hours to equal 93 full-time hospital employees and 23 full-time Trios Medical Group clinic workers.
But that doesn’t mean that many people will lose their jobs.
While some layoffs are expected, the majority of the cuts will happen through reducing some staffers’ hours, changes in shifts, attrition, limiting per diem training and the like, officials said.
Employees started being notified this week. The changes will be in place by next month.
“We have worked very hard to minimize the impact on people, particularly in reduction of force,” said Lisa Teske, Trios spokeswoman.
“We all recognize it’s a painful time. It’s not going to get better for us, our patients and the community unless we pay attention and right the ship,” she told the Herald editorial board.
Trios Health is the name of the Kennewick Public Hospital District’s system of care. It includes two hospitals and a network of care centers and services, with about 1,200 employees.
The Trios board last year voted to bring in the consulting firm Quorum Health Resources to complete a financial, operational and strategic assessment and plan.
As expected, the 400-page recently finished report paints a picture of a system that’s struggling financially.
Craig Cudworth, a Quorum employee who’s working as Trios’ chief restructuring officer, said there’s no single reason — Trios was caught in a “perfect storm.”
Factors range from aggressive competition to the district’s debt load, the report says.
Trios opened the new Trios Southridge Hospital and Trios Care Center at Southridge in recent years — two facilities officials have said were needed, but were also costly.
“With a debt-to-capitalization ratio of about 87 percent, the system is beyond what would typically be considered ‘fully leveraged.’ The magnitude of debt has crippled cash availability,” the report says.
The report recommends several steps toward sustainability.
▪ Making the staffing changes.
▪ Reviving an effort to seek $150 million in refinancing through the U.S. Department of Housing and Urban Development.
▪ Exploring the merits of pursuing bankruptcy protection. “That doesn’t mean we’re planning (to take that path), but the option has to be understood,” Cudworth said.
▪ In the same vein, considering the merits of affiliating or joining forces with another health system. Some entities have expressed interest, although nothing formal is in the works, Cudworth said. Kadlec Regional Medical Center in Richland and Lourdes Health in Pasco are part of larger health systems.
Other recommended steps range from establishing “a culture of accountability relative to work force productivity and organizational performance” to considering and implementing “impactful tactics to attract commercially-insured patients (e.g. employer health programs, etc.).”
Quorum has a contract with Trios through January 2018.
Cudworth is expected to be named interim CEO later this month. Glen Marshall, Trios’ longtime CEO, will officially retire in June and is transitioning away from day-to-day management.
Cudworth said Trios is committed to openness and transparency as it works its way through the improvement process.
It’s not easy to take the needed steps, but the district and community will be better for it, he said.
“This is a public hospital. It’s a community hospital. It’s built for the community,” Cudworth said. “The things that the board has courageously taken on are things that are necessary for this facility to continue to provide services.”