Grays Harbor Community Hospital announced Thursday that it would lay off seven employees and outsource their work to a private vendor. The employees work in the hospital’s health information management group, which, broadly speaking, deals with information the hospital presents to insurance companies and the federal government when it bills for services.

The estimated savings for the financially struggling hospital amount to about $783,000 annually, the hospital said.

The hospital has long suffered financially, which Director of Marketing and Public Relations Nancee Long says is due to a massive imbalance between how much it spends to service patients and the smaller reimbursement they get from federal programs such as Medicare and Medicaid.

“These are always hard decisions, it’s the first layoff in quite some time,” said Long. “If (the percentage mix of) Medicaid and Medicare continue to increase and we don’t get the return we need to move forward, then there will be more cuts going forward.”

According to Long, the reimbursements from federal funding increase at around 1 percent annually, while their expenses running the hospital can increase anywhere from 3 to 8 percent, making it hard to offset by simply improving efficiency. Last year, Long said the hospital conducted a year-long analysis of all departments’ productivity and sent doctors reports for how they must increase efficiency to avoid these kinds of cuts. She is pessimistic the hospital will ever get into a financially comfortable position due to a body of patients of which she said eight in 10 require government program funding.

“We’ve always been concerned; this will never be a rich hospital,” she said. “It will always be struggling because of our clientele, which we are honored to take care of. This town would be defunct without the hospital and it’s needed in the community. We’ve worked diligently to find the places where we can be more effective and this is the first of many. Some will be layoffs, some will be process changes, we’re attacking this from all angles.”

The concern is shared by the hospital’s local union representative John Warring. “We really despise outsourcing, the community surely needs every job it can get, and the more money outside our community, it’s worse off for everybody and the patients,” he said. “Surely something has to be done to get us out of this mess, and it’s quite a conundrum. I suppose I’d feel better if I thought this solved the problem, but really it’s just small steps toward what’s a very large problem.”

Warring works as the hospital’s shop steward, has been there over 40 years organizing bargaining agreements for workers and is the UFCW Local 21 Unit Representative. He knows it’s a daunting task for the hospital to get out of its financial hole, and believes part of the problem is the federal government’s failure to create a new affordable health care plan.

“The folks in D.C. are doing absolutely nothing to help anybody out with where they’re going with health care,” said Warring. “They don’t have a clue. They can’t agree to make the (Affordable Care Act) workable, and can’t seem to put something in its place.”

Long added that they are looking at other avenues to reduce costs and increase revenue, such as a decision Oct. 1 to reduce overnight and longterm occupancy to 49 beds. If the government approves that plan, it increases reimbursement rates to the hospital for some services and the hospital district would be in line to increase revenue between $2.5 million to $3 million per year. The hospital has, and would still have, 140 beds, but many are only needed for day procedure patients.