St. Charles Health System eliminated two executive positions on Friday, just three days after its CEO and president, Joe Sluka, announced his resignation. The nonprofit hospital system says it's eliminating the two positions to cut costs as it reports a loss of $17.5 million in the first quarter of 2022, according to the Oregon Health Authority.
The hospital system has operated on tight margins since the start of the COVID-19 pandemic. It posted its highest reported operating margin in 2019, bringing in nearly $57 million, but in 2020 it only earned $1.4 million after expenses, and in 2021 St. Charles reported more than $14 million in losses.
The role of executive vice president and chief physician executive, both held by Dr. Jeff Absalon, as well as the senior vice president of strategy, held by Rod Marchiando, will be vacated by Aug. 1. St. Charles's most recent public tax forms show Absalon made just over $600,000 in 2019, while Marchiando earned over $381,000 in the same year. Dr. Steve Gordon, the interim president and CEO of St. Charles, thanked the outgoing executives for their work and wished them well in their next endeavors.
Absalon and Marchiando are the first executives to go as the hospital addresses its funding crisis, but in May St. Charles laid off 105 people and eliminated 76 vacant positions. St. Charles said the positions were mostly non-clinical in areas like finance, IT and human resources. It's still aggressively hiring for clinical roles but is struggling to fill positions at pre-pandemic costs. A March report from Kaufman Hall, a financial advisory firm, tracked a 37% increase in per-patient labor costs between March 2019 and March 2022, and contract labor — like traveling nurses — increased from 2% of labor expenses to 11%.
Though there's a funding crisis at many hospitals, many St. Charles employees put some blame on decisions made before and during the pandemic. In June nearly 300 St. Charles employees, consisting of physicians, nurse practitioners and other health care workers, announced their intention to join the American Federation of Teachers Union, the United States' second largest teachers union that includes about 20,000 health care professionals.
In a press release Central Oregon Providers Network said it's not seeking a union to secure better pay or benefits, but to increase the staff's say in the decision-making process.
With a union, St. Charles will no longer be able to ignore our input affecting patient care. We need to be at the table and work with the administration to ensure patients are the top priority. Through collaboration, we can improve patient care and ensure responsible decision-making.—Dr. Josh Plank
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"With a union, St. Charles will no longer be able to ignore our input affecting patient care. We need to be at the table and work with the administration to ensure patients are the top priority. Through collaboration, we can improve patient care and ensure responsible decision-making," said Dr. Josh Plank, a hospitalist at St. Charles, in a press release.
Both Absalon and Marchiando are expected to stay through the month pending transition plans for their areas of responsibilities.
