ashland.news
June 13, 2024

Memo: Asante completes 3% workforce reduction across region, citing financial losses

An entrance to Asante Rogue Regional Medical Center in Medford. Rogue Valley Times file photo
February 13, 2024

Operator of hospitals in Medford, Grants Pass and Ashland has total of more than 6,000 employees

By Nick Morgan, Rogue Valley Times

Citing unsustainable financial losses over the past two fiscal years, Asante Health System concluded a 3% workforce reduction across its regional hospitals and clinics as of Friday, according to a memo to employees obtained by the Rogue Valley Times.

The memo, dated Friday, also states that “other expense reductions” have occurred, without citing specifics.

Asante provides medical care for about 600,000 people in the region, operating Rogue Regional Medical Center in Medford, Three Rivers Community Hospital in Grants Pass, Ashland Community Hospital, and Asante Physician Partners clinics across Jackson and Josephine counties. According to the health care provider’s website, Asante has 6,347 employees, including providers in Northern California. It is unclear how Northern California entities will be affected.

A spokesperson for Asante, when reached Friday by the Times, declined to comment.

The memo, addressed to “All Employees” and coming from “Executive Leadership,” states: “We do not make this decision lightly. We recognize that this decision impacts colleagues, friends and neighbors who have all made valuable contributions.

“Individual conversations with impacted employees have been completed as of today. … To those leaving Asante, we acknowledge, with heavy hearts and with gratitude, your collective efforts, skills and dedication. Thank you.

“For those impacted, we have provided severance pay based on tenure, payout of all accrued ETO and continuing health care coverage, and we will be offering resume and interview workshops, local employer job fairs and direct contact with a team that will provide employment resources.”

Asante’s memo to employees paints a dire financial picture for the health care industry. It mirrors a recent financial report from the health care provider issued Jan. 30 that showed Asante posted operating losses of $32,489,000 in the 2022-23 fiscal year ending Sept. 30 and $61,193,000 the prior year.

The memo notes “a dramatic shift” over the past two years “with rising inflation, reduced reimbursement, and recruitment challenges nationwide.”

It continues: “As we have shared with you in newsletters, employee forums and other communications, most hospitals have experienced an economic downturn coming out of the pandemic. Like most health care systems, Asante has devoted a significant amount of time, energy, and resources over the past two years to navigate these financial headwinds.

“While we’ve made noteworthy progress over the past 24 months, the payments we receive for our services continue to fall short of inflationary expense increases. Our efforts to reduce cost have not kept pace with underperforming revenue. Asante still has work to do.”

On Friday, the Times reported that Asante led the state in community benefit spending among hospital systems, particularly in the form of unreimbursed Medicaid payments.

Speaking to the financial difficulties, the memo states: “September 2023 marked Asante’s second straight fiscal year of operating losses, which is not a sustainable trend. Due to this we need to redesign certain areas at Asante.

“Our priority in this expense work has always been to minimize the impact at the bedside and focus our efforts disproportionately on administrative and support costs that can be removed from the organization or redeployed toward bedside care. We are actively recruiting for physicians, nurses, and other clinical staff, and will continue to do so.

“Starting today, we will operate differently as an organization to meet the current and future health care challenges in 2024 and beyond,” the memo states. “We are quite confident these changes create a pathway to vibrancy and sustainability, to remain a workplace of choice for our staff and providers, and to be our communities’ trusted health partner for life. Thanks for all that you do to move Asante forward.”

Asante officials noted that employees would be feeling “a workflow and emotional impact,” and offered a telephone number for employees to call for support services. The memo also said employees could bring follow-up questions or ask for additional support from “your leader,” and provided an email address for communications requests.

Asante has faced numerous challenges this year, including a Medford Police Department investigation into alleged “drug diversion” by an employee, and a $430,000 settlement with the federal government regarding years of alleged Medicare fraud involving a highly paid Medford heart surgeon.

Reach reporter Nick Morgan at nmorgan@rv-times.com or 458-488-2036. This story first appeared in the Rogue Valley Times.

Picture of Bert Etling

Bert Etling

Bert Etling is the executive editor of Ashland.news. Email him at betling@ashland.news.

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