Vancouver-based PeaceHealth is chopping 500 jobs, as a result of a $130 million budget shortage due to rising expenses, stagnant patient numbers, fewer Medicare benefits and lower reimbursement rates.

Peace Health chief mission officer Alan Yordy pinned some of the system’s financial challenges on Kaiser Permanante’s decision to transfer many patients from southwest Washington to Oregon.

Also key to the budget gap was the fallout of merger discussions between PeaceHealth and Franciscan Health System in Tacoma, which would have given the PeaceHealtha new presence in the South Sound.

Two-thirds of the position eliminations will be through layoffs to current employees. The rest of the jobs being cut are currently unfilled.