Health & Medicine

Company that runs Sacramento’s Dignity lays off 109 health care workers, citing budget woes

CommonSpirit Health, the health care giant that operates Dignity Health hospitals in the Sacramento region, laid off at least 109 employees in California and Arkansas, saying that certain regions are not meeting financial projections, according to company and union representatives.

Dignity Health confirmed there were layoffs in a statement to The Sacramento Bee but did not disclose the total number of affected employees.

Sean Wherley, a spokesperson for Service Employees International Union-United Healthcare Workers West, said Friday that the union had received word that at least 90 Dignity Health workers were affected in California. CommonSpirit also operates hospitals elsewhere in the nation as part of its Catholic Health Initiatives division, and CHI spokesperson Joshua Cook said Friday that 19 workers had lost jobs and nine vacant positions had been eliminated around Arkansas.

The California layoffs include at least 7 individuals at St. Joseph’s Medical Center in Stockton, at least four each at Mercy Medical Center Redding and Red Bluff’s St. Elizabeth Community Hospital, and at least 19 people at hospitals around the Sacramento area, Wherley said.

“There are a number of reasons we have not performed well in the greater Sacramento region, including payer mix changes, reimbursement rates, lower patient volumes and a significant shift from in-patient to outpatient procedures,” said Laurie Harting, president and chief executive officer of Dignity’s Greater Sacramento Division, in a video message to her team. “As such, facilities throughout our division have made extremely difficult decisions to reduce positions across a variety of departments to help the organization secure its future.”

Wherley said SEIU members had lost positions at a number of locations. In Redding, for instance, SEIU-UHW leaders received a memo stating that, after a review of the hospital’s staffing model, leaders decided to to eliminate one full-time equivalent in four job classifications: an information management clerk who handles birth certificates, a senior lab technician, a unit coordinator who supports medical staff, and an event/clerical coordinator.

In a communication to employees at Mercy San Juan Medical Center in Carmichael, hospital leaders said they planned a targeted reduction of workforce in both clinical and non-management positions. The memo said affected workers had been notified but did not cite the number affected.

Wherley said that the Sacramento-area job cuts affect four at Methodist Hospital of Sacramento and at least five each at Mercy San Juan, Mercy General Hospital and Woodland Memorial Hospital. He added that SEIU-UHW stewards will be meeting with Dignity management to get more information on the extent of its planned layoffs.

“Cuts to caregivers will hurt patient care, and we will be calling on Dignity to rein in its bloated executive salaries as an alternative to slashing patient care,” he said.

Hodges issued a statement from Dignity, which noted: “When staffing adjustments are necessary, we work closely with affected employees to identify other opportunities in our system for which they may be qualified. We recognize that reducing even a single position affects many inside and outside of our organization, and this is not a decision we take lightly.”

Dignity Health closed its merger with Catholic Health Initiatives early this year, and the combined company, now known as CommonSpirit Health, reported that its net loss was $290 million on revenue of $29 billion for its fiscal year ending June 30, 2019.

Special one-time charges and merger-related costs brought the total operating loss to $582 million, however, company leaders stated in a news release on 2019 earnings. The Chicago-based company said it expected its financial picture to improve over the next four years as a systemwide performance-improvement plan would produce at least $2 billion through growth and cost savings.

“Never in my career have I experienced such rapid change in the health care environment, and we need to change alongside it,” Harting said. “As a result, we need to strategize new ways to grow, and I promise you we are laser-focused on this.”

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Cathie Anderson covers health care for The Bee. Growing up, her blue-collar parents paid out of pocket for care. She joined The Bee in 2002, with roles including business columnist and features editor. She previously worked at papers including the Dallas Morning News, Detroit News and Austin American-Statesman.