Adventist Health is consolidating its seven care networks into five and laying off administrative staff to cut costs and ramp up operations.
The faith-based nonprofit says its five networks will be Northern California, Central California, Southern California, Oregon and Hawaii. CEO Todd Hofheins said in a news release on Wednesday that the reorganization would reduce overall costs, strengthen the operational structure and help expand the geographic reach of the system.
Roseville, California-based Adventists, home to 23 hospitals and more than 350 clinics, recently signed an agreement for Mid-Columbia Medical Center to join its Oregon State Network, pending regulatory and state approvals.
Adventists are also laying off 59 administrative staff, the system said in a Worker Retraining and Adjustment Notice Act notice filed with California. Wednesday. The layoffs began this month and will continue into April, with positions affected ranging from administrative director to project manager. According to the announcement, employees were given 60 days’ written notice of the pending reductions.
Adventist estimated the reorganization would save about $100 million but did not provide further details.
In July 2022, Adventist sent out a WARN notice of plans to lay off 52 employees.
Adventist reported a net loss of $637 million for the first nine months of 2022, according to their latest financial information. Revenue grew 4.4% year-over-year to $3.94 billion during that time period. Expenses rose 7.4% to $4.19 billion.
It is the latest in a string of health systems seeking to streamline operations in response to a challenging economic environment.
Last year, Renton, Washington-based Providence condensed seven regional divisions into three and cut executive positions. The nonprofit system attributes this change to financial challenges, including labor shortages, inflation, supply chain issues, and limited insurance reimbursements. Also in 2022, Nashville, Tennessee-based HCA Healthcare revamped its corporate structure, adding a third regional executive team to oversee five divisions starting this year, as opposed to management layers cut other health systems.
In January, Jefferson Health in Philadelphia announced it would merge the five divisions into three in an effort to streamline operations, citing labor challenges and inflationary pressures.
