Dear Friends and Neighbors,
Recently I visited Good Samaritan Hospital in Puyallup, part of the MultiCare Health System, which is the largest private employer in Pierce County. In the 2nd District, we have the Spanaway and Eatonville clinics as part of MultiCare. Like the state of Washington, the hospital has experienced less than expected revenues. However, Good Samaritan has adopted a much more realistic approach to lower revenues than the state.
- It recognized the situation was not temporary, and in fact, might get worse.
- It sought long-term solutions to budgeting.
- It implemented LEAN techniques to quickly improve efficiency.
- It reduced costs by improving, not decreasing, the quality of services.
Starting in 2009, MultiCare reduced expenses by $37 million through streamlining its methods of care in inpatient and outpatient facilities. Employees continued the exercise to create a cost structure improvement (CSI) team effort to improve efficiency and reduce costs to patients. In 2010, that saved the hospital $21 million. This continued into 2011 as the state budget and economic outlook has not improved. MultiCare employees and administrators are continuing to strive to find better ways to provide the best service, by improving how they work and eliminating waste.
MultiCare approached their budget situation rationally and with the future in mind. The state avoided the problem and hoped things would turn around soon.
Of course, the greatest costs in almost any organization are salaries and benefits for staff. MultiCare reduced the number of employees, but not purely through layoffs and with concern for their welfare. Out of the 561 staff reduced, 39 percent was due to voluntary separation in the form of severance or early retirement packages. Another 47 percent was reduced by not filling open positions. While some staff were laid off, many were redeployed to another department.
If we care about delivering needed services to residents, the state has to cut overhead to be more efficient. To do that, we must get serious about our greatest expense: labor. However, we can reduce the size of government with minimal impact to public employees, as MultiCare did. When the state implemented furloughs for state employees while offering the same levels of service, it proved we can run the state with less staff hours.
While MultiCare reduced overhead in order to continue providing the same quality of service, the state has done the opposite in favor of retaining staff levels. Reducing labor through attrition and voluntary severance can reduce the number of layoffs and allow state employees better predictability without furloughs.
I want to emphasize that I am not against public employees. They are a vital part of our team. However, we must re-think how we run the organization of the state. Government should not be a jobs bureau; it should offer the best services to citizens and help small businesses be successful and create jobs.
Please continue to provide me your feedback on the information and insight I share. It's important that I represent your best interests in Olympia, and I love hearing from you. I would also appreciate you forwarding this e-mail to your friends and family for them to subscribe to these updates, so I can expand the constituents I communicate with and hear from.
It's an honor to serve you.