Due to the financial strain caused by the COVID-19 pandemic, Palomar Health, the largest health care system in the state by area, announced Tuesday it will eliminate 317 positions effective April 29, to ensure the organization can continue providing healthcare to North San Diego County residents now and in the future.
Employees who are affected will receive a severance package and are immediately eligible for unemployment and health insurance coverage through their severance period.
The layoffs are a result of a 45-50% decrease in patient visits throughout the health system, which led to a $5.7 million operating loss in March alone with losses in April expected to be worse, yet hard to estimate given the uncertainty of the virus.
Palomar Health said that it will slowly and safely resume surgical procedures based on the availability of personal protective equipment (PPE) and virus testing, but the loss of revenue from shutting down elective surgeries for the past six weeks cannot be recovered quickly. Future patient visits may also be negatively impacted by the uncertainties of the economy as patients may lose insurance due to unemployment and delay surgeries for more prosperous times.
“These are extremely tough decisions that are taken very seriously because we know they affect the livelihood of our employees,” said Palomar Health President and CEO Diane Hansen. “However, the sooner we make these tough decisions, the sooner we will be able to stabilize our business and get back on the road to recovery. It is our responsibility to ensure Palomar Health provides high-quality medical care to our community during and after this pandemic.”
“Palomar Health not only provides an essential service to the regions half a million residents, but is also proud to be one of the largest employers in North County,” Hansen said. “We plan to remain a vital economic engine, so we must take these steps now to protect the financial stability of our organization.”
In total 317 positions were impacted, or 5% of the workforce. Of those, 50 were clinical RNs with the majority being part-time positions, with the remaining 267 positions spread across the organization ranging from clerical staff to technicians.
During a press conference Tuesday afternoon Hansen noted that only 50 of the positions lost were bedside clinicians and 7% were leadership and six were fulltime positions.
Hansen described how, two weeks into the Covid-19 crisis that they looked at the financials. “We knew we had to take drastic measures,” she said, predicting that the figures for April, “will be much worse.”
Up until last week Governor Gavin Newsom’s executive order prevented the state’s hospitals from doing elective surgery, which makes up most hospitals’ most lucrative procedures. This week Palomar has resumed essential surgeries that it had put on hold. It will be slowly begin ramping up as testing and PPE (personal protective equipment) allows.
It is necessary to cut expenditures in order to meet legal obligations to pay bonds that must be met by the end of the fiscal year on June 30 said the CEO.
“No one could have predicted the impact” that the Covid-19 pandemic would have on the health care system,” said Hansen. “No one is more disappointed than I am where we are today.” This year, she said, was supposed to have been one of growth, “and of taking two steps forward. . . Now we have to take one step back.”
She said she hoped that if the district’s business improves that eventually they might be able to bring back some of the laid-off employees. “I hope we don’t find ourselves in a tough position when business picks up,” she said. “We don’t know how quickly our volume will return.” She said she hoped that the employees who were let go, “enjoyed working with us and will return to us.”
Asked if anyone would be facing cuts in pay, the CEO said, “We have everyone to do more with less and take on more responsibility and work longer hours so I don’t think it would be right to ask them to take a cut in pay.”