NORTH BAY, August 12, 2009 - Kaiser Permanente will eliminate about 1,800 positions in California, 1,200 of which are in Northern California, though less than 100 will be in Marin and Sonoma. Specific numbers were not available for Napa or Solano.
"Like all health care organizations, Kaiser Permanente continues to feel the effects of a difficult economy and an uncertain industry environment, including lower Medicare reimbursement rates and changes related to health care reform," officials from the nonprofit said in a statement.
The reductions take effect sometime in the next few months and represent less than 2 percent of the group's Northern California work force. A local spokesman said the change affects mostly nonclinical part-time, temporary or on-call union workers and all are offered severance and extended benefits if they can not transfer to another position or location within the organization.
Locally, membership has increased slightly since Jan. 1, but decreased by about one percent in Napa and Solano. Northern California as a whole has lost 50,000 people of about 3.2 million during the same time frame. Kaiser employs 90,000 people in California.
Following is a statement from Northern California Kaiser officials:
Statement from Kaiser Foundation Health Plan/Hospitals, Northern California
Senior Vice President, Human Resources Gay Westfall:
Like all health care organizations, Kaiser Permanente continues to feel the effects of a difficult economy and an uncertain industry environment, including lower Medicare reimbursement rates and changes related to health care reform. Unemployment has accelerated to a 30-year high of more than 11 percent in California, and the state budget crisis has further aggravated the effects of the economy. As a result, we have lost members, experienced lower patient volumes, and seen a slowing revenue trend that is expected to continue into next year.
We will continue to provide superior care and service, while prudently managing our expenses in order to keep our care affordable for our members and customers. We already have taken several steps to help us remain financially strong in these challenging times. We have deferred merit salary increases for non-represented hospital and health plan employees; adjusted timelines for our capital spending; reduced full-time employee counts through attrition, greater flexibility in managing schedules and assignments, careful hiring and improved attendance; and laid off non-represented employees.
Despite the actions we have already taken, it has become clear that we need to make additional workforce adjustments. Today, approximately 1,200 represented positions were eliminated (just under 2% of our workforce). Approximately one-third of these positions are temporary, on-call or short-hour employees. Most medical centers have positions that were eliminated. These actions will not result in reductions in the level of service and quality care we provide our members and patients.
This has been a difficult decision, and we are taking many steps to minimize the impact on our employees. Position elimination doesn't necessarily mean an employee will be laid off; it starts a year-long effort to place employees in other positions where possible. In addition we are offering severance packages with up to 52 weeks of severance pay, extended health care benefits and assistance in finding new employment within Kaiser Permanente. Plus, we are also offering incentives to certain groups of employees to voluntarily leave the organization. Our hope is that the number of people who choose voluntary separation will help reduce the number of employees affected by the position eliminations.