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Medford Clinic to cut 82 positions Cites loss of nine doctors, shortfall in HMO revenue By SUSAN JAY Medford Clinic is shrinking its 600-employee work force by 82 positions to close a $2.5 million revenue gap. The major causes for the shortfall are lost revenue from nine doctors who have left in the past six months, less revenue but higher costs associated with HMOs and the initial investment in new doctors, clinic administrators said. Nine new physicians will start at the clinic in the early summer and fall. But it costs about $100,000 to set up each new recruit the first year with new staff, equipment and exam space, said Linda Seely, vice president of human resources and corporate relations. Those new physicians, on the other hand, rarely generate revenue the first year while they establish their practice. During the downsizing, administrators said, employees will not be handed pink slips and told to go right away. The process will be phased in over the next six months, and most employees with good performance records will be offered other positions in the clinic. The bulk of the targeted positions are administrative and not in the clinical side. Already, 38 of the 82 positions have been eliminated through attrition, Seely said. The clinic aims to cut another 24 positions by June 1 and the final 20 by Oct. 1. To put the numbers in perspective, Seely said, the clinic hired 150 employees in 1998. The number of positions to be eliminated is an estimated 13.6 percent of the clinic's work force. The deficit is an estimated 6 percent of the clinic's $40 million budget. "If we manage attrition right and get on top of performance, we could actually minimize the number of people who would lose their job," said Jerry Livaudais, interim CEO. "At the end of it, I still think there will be some people who will lose their jobs," he said. The nine physicians who left include internist Robin Miller, obstetricians Miguel Carbonell and Lorie Morgan and gastroenterologists Peter Adesman and Anthony Haulk. They left for family, personal, financial and other career reasons, Seely said. The specialities of the new physicians coming on board in a few months include family practice, orthopedics, nephrology, dermatology, podiatry, vascular surgery and internal medicine. Livaudais said the clinic also is looking at more ways to cut back by focusing on which positions and expenses do not affect the quality of patient care, such as marketing campaigns. Other motivations for the clinic to become a leaner health-care operation is tougher competition and an ever-changing market. Livaudais said free-standing, physician clinics such as the Medford Clinic are finding it harder to compete with not-for-profit hospital-owned doctors groups like the Southern Oregon Health Trust and Providence Medical Group, which have deeper financial resources to subsidize their practices. "We are just not as big as Asante or Providence," he said. Livaudais believes a trimmer, more focused Medford Clinic, with a healthy bottom line, will be better prepared for the next wave of changes in health care. "I don't know what change is coming, but it's coming." Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA