Asante Warns of $50M Shortfall
A May 4 memo says the Southern Oregon health system is losing money and expects 300 or more role reductions in the coming months.
MEDFORD, Ore. — Asante President and CEO Tom Gessel told employees and medical staff Monday that the Southern Oregon health system is facing significant financial pressure and must take difficult steps to protect core clinical services.
In a May 4 memo, Gessel said Asante is dealing with rising expenses, declining private insurance coverage, Medicare and Medicaid underpayment, regulatory pressure, and broader economic challenges in Oregon.
“We are losing money,” Gessel wrote. “Our bottom line from daily operations is negative for the first six months of this fiscal year.”
According to the memo, Asante lost more than $12 million in March, bringing its operating loss to $16 million for the first half of the fiscal year. Gessel warned that without action, the health system could face an estimated $50 million budget shortfall in 2027.
A major issue outlined in the memo is Asante’s payer mix. Gessel said patients with private insurance now make up just over 14% of Asante patients so far in 2026, the lowest percentage in the organization’s history. More than 75% of patients are covered by Medicare, Medicaid, the Oregon Health Plan, or other government programs, which the memo says pay less than the cost of providing care.
Gessel also said almost half of Asante’s combined losses this year are in Ashland, where inpatient and obstetrical services are scheduled to consolidate to Rogue Regional Medical Center in May as the Ashland campus transitions to an outpatient-only extension of RRMC.
The memo outlines several planned actions, including advocacy for policy changes, outside reviews of billing and supply chain processes, workforce reductions, future wage and benefit evaluations, clinical efficiency work, and a review of patient services across Asante’s hospitals and clinics.
The most immediate impact is expected to be staffing. Gessel said Asante will focus heavily on non-clinical roles, though some clinical areas may also be affected.
“I anticipate the ongoing headwinds, including the federal and state cuts to Medicaid, will result in 300 or more roles being eliminated in the next several months,” Gessel wrote.
Gessel said corporate building staffing has been reduced by 67% since 2023, while leadership roles have been reduced by 23% across the organization. The memo also says Asante will likely close the corporate building on the RRMC campus permanently and convert the space to physician clinic use.
Asante also plans to evaluate patient services this summer across its three campuses and outpatient clinics. Gessel said the goal is to preserve the core clinical services that make up Southern Oregon’s health care safety net while determining whether some services can no longer be offered because of chronic funding deficits.
Despite the financial concerns, Gessel said Asante will continue recruiting physicians and mid-level providers, with patient-facing roles remaining the priority.
The memo closes by asking employees to stay informed, participate in advocacy if interested, and share responsibility as Asante moves through the changes.
“This is a moment for all of us to lean in,” Gessel wrote. “Every decision we make matters – how we serve our patients, conserve resources, improve efficiency and support each other.”
Download Asante’s full memo here or read below.
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