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Allina looks at time off, cuts to buoy bottom line
Accrued time off is a negative on the balance sheet, so some employees will have to use it. Job cuts are possible.
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Citing bad financial numbers, Allina Hospitals and Clinics will require some employees to take paid time off and may lay off workers at United Hospital before the end of the year.
This will help Allina meet its budget projections for the year, spokesman David Kanihan said Friday. Paid time off that employees have accumulated shows up as a liability on a company's balance sheet. Having employees use that time off shrinks the liability and adds to the bottom line.
The Twin Cities' biggest medical group did well in the first eight months of the year, but the effects of industrywide trends -- such as rising costs of care and declining reimbursements -- "came to a head in September," Kanihan said.
Nonclinical and nonunion employees will be required to take 80 hours, the equivalent of two weeks, of paid time off before the end of the year. This will be done through minimal staffing during the Thanksgiving and Christmas holidays, with some non-patient-care departments closing outright.
In addition, Allina might lay off an undisclosed number of employees at United Hospital in St. Paul.
"United appears to be the only place where it's almost certainly going to be necessary to do layoffs," Kanihan said.
In January, Allina reduced its workforce by 350 positions through layoffs and attrition. At the time, the company cited a rising caseload of charity and uncompensated care, coupled with flat to modest increases in the number of patients treated. The most layoffs -- 200 -- were at Abbott Northwestern Hospital in Minneapolis.
Allina isn't the only hospital system that has cut staff. Last year, Fairview Health Services shed 250 positions.
Allina owns 11 hospitals and 45 clinics in and around the Twin Cities and employs 22,500 people. It had $2.35 billion in operating revenue in 2006.
Chen May Yee • 612-673-7434
Chen May Yee • mychen@startribune.com
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