For the third time in 12 months, Samaritan Health System in Phoenix is reorganizing its management as part of an ongoing effort to cut costs and improve delivery.
Samaritan-Arizona's largest healthcare provider-will consolidate the management of Good Samaritan Regional Medical Center in Phoenix and Desert Samaritan Medical Center in Mesa, Ariz., into one management team. Samaritan also will merge the management of Glendale, Ariz.-based Thunderbird Samaritan Medical Center and Phoenix-based Maryvale Samaritan Medical Center into a single organization.
Additional management consolidations will occur for Samaritan's ambulatory and behavioral health services as well as the finance, managed-care and rural health divisions. Samaritan couldn't determine how many employees will be laid off in the restructuring. However, executives expect to save as much as $3 million annually from the changes, which are expected to be completed by the end of the year.
The move is the latest attempt by Samaritan to streamline services and cut costs. A previous restructuring in February eliminated 138 middle-management and administrative positions, resulting in the layoffs of 128 employees. Samaritan estimated a $7.5 million savings from that layoff (Feb. 28, p. 30).
Last November, 30 administrative employees at Good Samaritan Regional Medical Center lost their jobs in a similar move (Feb. 7, p. 46). Not counting the latest restructuring, Samaritan has laid off 199 of its 11,770 corporate employees, executives said.
"By consolidating the management of these institutions, we're creating a system management structure that will foster integration, remove management layers and lower our cost of providing services," said James Crews, Samaritan's president and chief executive officer. It's also the best way to improve efficiency and compete for future business, he said.
The restructuring doesn't appear to be driven by poor earnings. Three of the four hospitals involved in the restructuring reported solid, if not impressive, earnings in 1993.
For example, according to data compiled by HCIA, a Baltimore-based healthcare information firm, Good Samaritan Regional Medical Center reported a net income of $9.5 million on net patient revenues of $333 million in 1993.