Facing a $2.6 million budget shortfall over the next fiscal year, Queen of the Valley Medical Center announced cutbacks this week, including eliminating positions, a hiring freeze and decreases in hours or status for several workers.

With a total of 32 positions affected, the changes affect fewer than 2 percent of the company’s 1,580 employees.

Management and administrative positions are the ones primarily impacted — people with titles of director, manager or lead, according to Dante Allen, executive director of government relations and communication at the Queen.

“Very little came from patient care positions,” he said. Allen would not specify which departments are feeling the impact.

The Queen is offering transfer opportunities within the organization for all of the employees whose positions have been eliminated, read an e-mail to employees from CEO Dennis Sisto. The Queen is part of the St. Joseph’s Health System, which has several other hospitals in California.

The $2.6 million shortfall represents less than 1 percent of the company’s $238 million dollar operating budget for fiscal year 2008, which runs July 2007 through June 2008, said Allen.

The decision came after the hospital already trimmed $1 million from its budget by “monitoring staffing and productivity, decreasing outside travel and other expenses, and placing added scrutiny on new and replacement hiring,” said the e-mail.

“Fluctuations in inpatient volume combined with shifts in the types of patients and illnesses we treat,” resulted in the Queen struggling to meet its operating budget, read the message.

During the last six months, patient volume was 3 percent lower than expected, Allen stated. The Queen also noticed a shift in the types of patients treated.

“This reflects the severity of patient illnesses, which is related to reimbursement” from insurance carriers or federal health care programs, Allen said, explaining that in most cases, lower severity equals lower reimbursement. During that same period another reimbursement measurement was down 7 percent.

“There are a number of factors that impact hospital costs of providing care and the reimbursement it receives,” explained Allen in an e-mail. “A good example of this is a heart surgery vs. delivery of a baby. Length of the patient stay, and private vs. public insurance are also major factors. Like many health care facilities throughout the nation, the Queen has had challenges keeping factors in balance.”

Allen called the decrease unpredictable, and the hospital may already be rebounding.

“There’s no clear explanation,” said Allen. “I know other hospitals throughout the state had similar situations.”

“Our main objective was to not compromise our mission to provide high quality and compassionate care to all our patients,” said Allen.

“We’ll see some shifting behind the scenes. Our hope is that the direct impact to folks in the community should be minimal to none.”