SANTA ROSA -- St. Joseph Health is notifying 37 employees in Sonoma County that their positions are being eliminated as part of a broader effort to reduce costs by $15 million over the next year, officials said today.

The staff reductions affect 26 employees from Santa Rosa Memorial Hospital and 11 at Petaluma Valley Hospital, and they represent "the most difficult of several steps the nonprofit health care provider is taking" to achieve the savings, the health system said. The staff reductions will save an annual $3 million, according to the health system.

The savings plan is an attempt to offset declining reimbursements and to control costs "in an increasingly price-competitive marketplace," according to St. Joseph Health, attributing some of the pressures to the Affordable Care Act that reduce Medi-Cal and Medicare reimbursements.

Those changes in reimbursement are expected to lower revenues at St. Joseph Health's two Sonoma County hospitals by more than $76 million over the next five years, according to the health system.

“This is a very difficult, painful time, especially for our 37 co-workers who are losing their jobs,” Todd  Salnas, who oversees 2,149 individuals employed by St. Joseph Health in Sonoma County, said in a statement. “They include long-serving, dedicated staff who’ve cared for our patients and community for years. The financial realities we faced in making these tough choices do not diminish our sense of loss or our gratitude for each employee who is affected.”

The 30-day notices to affected staff members follow an announcement from Mr. Salnas to employees and physicians on April 2, explaining "the urgency" of saving $10 million at Santa Rosa Memorial Hospital and $5 million at Petaluma Valley Hospital.

The health system also said it is attempting to avoid further staff reductions by taking the following steps:

 -- Improving labor efficiencies throughout the organization, including minimizing overtime and premium pay.

 -- Combining, consolidating or eliminating management positions.

 -- Renegotiating contracts with staffing agencies.

 -- Renegotiating contracts with physician groups at Petaluma Valley and Santa Rosa Memorial hospitals.

 -- Reducing expenditures on other services contracted through outside vendors.

 -- Centralizing several non-clinical support functions such as clinical information systems, purchasing, and telecommunications as part of a system-wide restructuring affecting all St. Joseph Health ministries.

 -- Optimizing and growing outpatient diagnostic testing throughout Sonoma County.

 -- Consolidating services at its Ambulatory Surgery Center in Santa Rosa.

 -- Renegotiating contracts with outside medical and non-medical suppliers.

 -- Investing in clinical service lines and services offering growth and revenue opportunities.

 The employees whose positions are being eliminated will receive severance pay according to years of service with St. Joseph Health.