OAKLAND: Summit Medical Center Forced To Make Cuts, May Merge
Summit Medical Center, "in the wake of surprisingly steep Medicare cuts and managed-care-related losses, needs to slash at least $9 million from its current operating budget," the San Francisco Business Times reports. The Oakland hospital has experienced a steady decline in financial health since posting a $4.1 million profit for 1996. In 1997, the facility "lost $3 million during the last six months of the fiscal year," and CEO Irwin Hansen has projected losses of $6 million for the current year. "Since the hospital needs to make $3 million a year to stay financially healthy, it 'must make up for a $9 million budget shortfall' this year," Hansen said. The cuts "could translate into an 8% reduction in staff -- or roughly 140 of the downtown Oakland hospital's 1,750 full-time equivalent positions," the Business Times reports. Managers have until "April 10 to draw up plans to slash department costs," with "[l]ayoffs and other cuts ... expected by early May."
The Business Times reports that the hospital's board is also considering merging with either Sutter Health of Sacramento or Tenet Healthcare Corp. of Santa Barbara. But SEIU Local 250 of the Health Care Workers Union, "which is engaged in a bitter corporate campaign against Sutter," contends that "officials at 517-bed Summit are manipulating the numbers to help gain board approval for a merger." John Borsos, the director of Local 250's hospital division, said, "The timing sends up all kinds of red flags." Hospital officials, however, "denied that there is any link between the financial news and the timing of the affiliation vote." The board is expected to vote on the merger proposal by March 26 (Rauber, 3/23 issue).