SPH layoffs lead to resignation

Posted: Sunday, February 04, 2001

HOMER -- Dr. Paul Eneboe has resigned as South Peninsula Hospital's chief of staff, saying he is too angry over the way five upper-level managers were dismissed from their jobs two weeks ago to be effective in the facility's top medical position.

In a terse letter Jan. 25, Eneboe said "good people had been hurt badly" by the actions taken by Hospital Administrator Charlie Franz and the hospital's board of directors, known as the Operating Board.

The five had been let go because the hospital was more than $600,000 in the red halfway through its fiscal year and looking at a year-end deficit of more than $1.2 million. Estimates say the dismissals will save the hospital more than $500,000 a year. Eneboe said he found it intolerable that other options were not fully explored before the five were fired.

The dismissals had nothing to do with a failure to perform on the part of the five, but were strictly a matter of economics, Franz said.

"I was very disappointed when I learned of Dr. Eneboe's resignation," Franz said. "He's a major contributor to the hospital and a well-respected leader on the medical staff."

Eneboe will continue to practice medicine at the hospital but will not act as chief of staff, an elected position bestowed by a vote of hospital physicians with a term of two years. Eneboe has held the position several times during his 32 years as a physician in Homer.

He laid into the administration and the board during a meeting Jan. 24 over the way the five managers were let go. The next day he tendered his resignation as chief of staff.

During an interview Jan. 26, Eneboe said he regretted some of the things he had said, and that the resignation had a lot to do with providing an opportunity for doctors to choose someone else to fill the position. He said the job might benefit from "a cooler head."

Eneboe said his beef has to do with how the five were dismissed, not with the decision itself. What upset him the most was that they were dismissed with no warning. One employee was only months from completing her 30th year with the hospital. Eneboe said he understood the obligations Franz and the board faced and recognized the difficulty under which the decision was made.

"I want to say at the start that I believe that the administration and governance at the hospital is far and away the best it's ever been. We have a really good board and a really good administrator," he said. "The main reason I've resigned is that I'm angry and I lost my temper and said things I shouldn't have said at the board meeting. Maybe it would be better for a cooler head to be chief of staff."

Seeing friends getting hurt, "I probably overreacted," he added. "I dumped on the board."

Eneboe said he does not think Franz relayed the seriousness of the situation adequately or soon enough to the five fired managers. Had he done it earlier, perhaps the reduction in force could have been avoided. Perhaps not, he acknowledged, but then, feelings might not have been so badly hurt.

Franz said he has great respect for Eneboe. As for his verbally slamming the board in anger, Franz said, "Dr. Eneboe is a human being."

Franz said that while he and Eneboe don't always agree, they have had a good working relationship.

"Both of us have an appreciation of the skills and experience the other brings to the table," he said.

Eneboe said that South Peninsula Hospital is facing serious financial problems, which are largely the fault of no one at the hospital. The situation does not derive from poor management or bad judgments, he said. For the most part, its come from things out of the hospital's control.

The hospital self-insures by making its health care services available to the staff, but that staff is aging and is using the system at an increasing rate.

It is not a case of more workers simply going to the doctor for colds, Eneboe said. Rather, in the past two years, several employees have faced severe medical crises, including cancer, driving those costs sky-high.

"They were huge, unavoidable costs. Unpredictable costs two years in a row," Eneboe said.

South Peninsula is not alone. Nationwide, the health care work force is aging and younger people are not entering the field fast enough, Eneboe said. Self-insured hospitals will see their costs rise as their employees age. Ultimately, the hospital will have to reassess its health insurance program, Eneboe said, and a change in employee benefits may have to be negotiated with the union which represents the bulk of hospital employees.

If the unexpected medical problems faced by employees was one shoe, the other fell hard when Congress unexpectedly cut Medicare reimbursements, Eneboe said. He acknowledged that, given the facts, Franz had a tough decision to make. But he didn't make it in a vacuum. The board of directors also was involved. Deciding where to make cuts when they are necessary is "a difficult question to answer," he said.

Other issues also point to questionable financial planning, including bonuses to hospital workers last year, despite the financial problems. That, too, was a judgment call on the part of the administrator and the board, Eneboe said.

South Peninsula Hospital's fiscal problems are not about to close the doors, Eneboe said. The facility runs on a "break-even" budget. If it ever runs disastrously behind, there is an option to use property tax dollars for operations. That is something the hospital has avoided doing and is not something it wants to do. Property taxes have historically been used for capital improvements. However, there is no law barring the use of taxes for day-to-day expenses.

"That's really the issue," he said. "It's not about closing the doors, but whether you can keep from using tax dollars for operations."

Franz said he has discussed with Eneboe the possibility of withdrawing his resignation as chief of staff. He also said he knows that several doctors on the medical staff have asked that he reassume the job.

As of Wednesday, Eneboe had not said if he would.

Hal Spence is a reporter for the Homer News.

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