Sutter Health closing nursing unit, laying off 72 at San Francisco hospital

Dive Brief:

  • Nonprofit healthcare system Sutter Health is closing St. Luke’s skilled nursing and sub-acute units and laying off 72 nurses and nursing assistants at California Pacific Medical Center (CPMC) in San Francisco, San Francisco Business Times reported.

  • In a letter to employees, Edward Battista, vice president of human resources, told employees that layoffs will happen in August and the units will close in October. About 44 sub-acute care patients will need to move to other facilities.

  • The decision is part of transitioning to a new $600 million campus that’s scheduled to open in early 2019.

Dive Insight:

Closures and layoffs are sadly becoming a regular story in healthcare. Earlier this month, NYC Health + Hospitals cut 476 management positions to save $60 million in the next fiscal year after losing $776 million for the first half of FY 17 and three other hospitals recently closed or are expected to close because of reimbursement issues.

In Sutter Health's case, the closures and layoffs are associated with a new facility and a change in focus. Sutter Health invested $972 million in new facilities and technology in northern California last year. Over 10 years, it's invested nearly $10 billion. 

The decision to close the two units is the second big piece of news coming from Sutter Health in California last week. The health system also announced that it is working with Aetna on a jointly-owned health plan in northern California. More than 3 million residents in northern California receive care from Sutter Health providers. The two companies hope to begin self-insured commercial plans in the middle of next year and fully insured PPO plans in early 2019.

Filed Under: Finance Hospital Administration
Top image credit: Tim Bartel