St. Charles Bend nurses have voted to ratify a new contract with the health system. In this May 2021 file photo, nurses in the St. Charles Bend intensive care unit treat a COVID-19 patient.

Two high-ranking executives at St. Charles Health System, one of whom was the face of medical care during the pandemic, have been laid off in a cost cutting measure.

The health system announced to staff on Thursday that Dr. Jeff Absalon, St. Charles chief physician executive, and Rod Marchiando, senior vice president of strategy, will be laid off effective Aug. 1.

The announcement comes two days after the departure Joe Sluka, St. Charles Health System CEO, who stepped down from his position on Tuesday. In the past three months, Central Oregon’s largest employer has been plagued with layoffs, financial losses and , layoffs and financial losses.

Absalon, who joined St. Charles in 2002 and was promoted to the executive position in 2011, made frequent health statements throughout the pandemic, talking directly to the community as businesses were shuttered, masks were required and the hospital limited non emergency surgeries to keep resources focused on COVID-19 patients.

During his tenure, Absalon also helped form the St. Charles Medical Group.

In June, members of the same medical group signed cards indicating they wanted to form a union. About 300 physicians and health care workers in the medical group said they wanted to have more say in decision making that affects patients and that was a chief reason for forming their union, the Central Oregon Providers Network. A vote, however, has yet to be held, according to the National Labor Relations Board, which oversees union formation.

The four hospitals in the St. Charles system reported a first quarter negative operating margin — revenues minus expenses — of $17.5 million in the first quarter of 2022, according to Oregon Health Authority data. In the same period in 2021, the health system reported a positive $14.5 million operating margin.

In a memo to the staff on Thursday, the health system upped the operational losses to more than $40 million through June. The memo also states that the hospital had no plans for additional layoffs. The health system’s board of directors named Dr. Steve Gordon as interim president and CEO.

“I want to sincerely thank (Absalon) and (Marchiando) for their many contributions to St. Charles throughout their tenure,” Gordon said in the memo. “They’re talented executives who have dedicated years of their lives to the betterment of the health system. They care deeply about our caregivers and the communities we serve.”

In May, the health system laid off 105 workers and eliminated 76 positions as a way to stem the growing financial losses.

Even with the layoffs, the health system had a 6.7% operating loss.

Also in May, when the health system announced its first quarter losses, Matthew Swafford, St. Charles chief financial officer, said if the hospital can’t address its financial problems it could mean a partnership with another hospital or an elimination of services.

On Friday, Lisa Goodman, St. Charles Health System spokeswoman, said the health system is not entertaining any offers to purchase it.

Multicare Health System is always looking for like-minded partners, said Rachel Chittick, Multicare Health System corporate communications specialist. “However, we have not made an offer to St. Charles Health System,” she wrote in an email.

Former St. Charles Health System board member Knute Buehler said recent events at the hospital could trigger speculation about its future.

“Under such circumstances trust in leadership and public transparency are vitally important,” said Buehler, who is also a former state representative. “In the past, these characteristics have been lacking at St. Charles Health System, which deeply harmed relationships. It’s an opportunity to do a reset.”

Public documents from 2020 show that Absalon was paid $666,981 in direct compensation and $117,516 in other compensation. Marchiando was paid $394,525 in annual compensation and $83,397 in other compensation.

“I’m so proud of our talented medical professionals and support staff who continuously put our patients first and provide truly exceptional care,” Absalon wrote in a memo to the staff on Thursday. “Thank you for allowing me the privilege to have worked alongside you and to learn from you over two decades.”

Marchiando, who joined St. Charles in 2015, focused on building a culture of continuous improvement through the Value Improvement Practice team, according to the memo to the staff.