PLEASANTON -- On the heels of longtime CEO Marcy Feit's abrupt departure two weeks ago, ValleyCare Health System has announced the layoffs of 24 employees.
Hospital officials said the Wednesday layoffs are part of ValleyCare's efforts to address fiscal challenges related to the new health care law.
The layoffs, 14 of which came from the Livermore campus and 10 from Pleasanton, consisted primarily of support staff, said Scott Gregerson, ValleyCare's interim CEO.
None of the eliminated positions came out of hospital or patient care areas, with the exception of a cardiac rehabilitation program in Livermore, which was closed. It employed four part-time employees, who together did the work of 1½ full-time equivalents, he said.
The layoffs had nothing to do with Feit's departure, said John Sensiba, chairman of the ValleyCare board of directors. In fact, the organization has had budgetary shortfalls over the past four years that have made its current financial situation unsustainable. Last fiscal year, the shortfalls hit their peak at $5.1 million. But he said he still could not reveal why Feit, who was ValleyCare's CEO for 15 years, is no longer with the organization, though he hopes to at some point.
The organization's leaders expressed regret over the layoffs but said they were necessary to maintain the organization's financial health in the era of health care reform. ValleyCare must transform from a primarily acute-care organization to one that is a more comprehensive, accountable-care model, they said.
In an email sent to all of its 1,600 employees on Wednesday, Gregerson said although the organization is known for its compassionate care and has excellent patient satisfaction scores, "we are facing serious financial issues and will need to work hard in order to secure our future."
"Our current financial trajectory is unsustainable, and as such we must take steps now to achieve better results," he said. "Additionally, we will need to consider some form of partnership with a system that shares our commitment to patient quality while remaining responsive to local needs."
The layoffs were recommended to the board of directors last week, as part of a short-term financial relief plan that sought to maintain the long-term financial health of the organization, which earns about $286 million in annual revenue. The layoffs will slash $1.8 million from the budget and don't include savings from Feit's job. She earned $905,000 in fiscal 2012.
"Our financial situation is the same as everyone else's," Gregerson said in a phone interview Thursday. "There are challenges in the viability of the industry, and it's quickly evolving, and you have to evolve with it. And there were adjustment in staffing level that needed to be made -- and we were right-sizing our staff."
Contact Joyce Tsai at 925-847-2123. Follow her at Twitter.com/JoyceTsaiNews.