It’s been the mantra of hospitals across the nation since before the Affordable Care Act became law: Obamacare means less money for hospitals.
Last Thursday, Petaluma felt the full weight of that concept when St. Joseph’s Health — which has been saying it needs to cut $15 million from its annual budget since April — laid off 11 Petaluma Valley Hospital employees to help reduce costs. The not-for-profit healthcare provider also laid off 26 employees from Santa Rosa Memorial Hospital.
The cuts come at a pivotal time for St. Joseph’s in Petaluma. The healthcare provider has been operating the hospital for the Petaluma Health Care District since the late 1990s, when it signed a 20-year lease. That expires in 2017. As the contract winds down, St. Joseph’s has expressed a desire to continue running Petaluma Valley, despite losing money over the past several years.
Meanwhile, the Petaluma Health Care District has begun studying operations at the hospital, expecting to complete an analysis of St. Joseph’s management of the facility within the next 12 months. At that point, the Health Care District will decide to either sign a new lease with St. Joseph’s or put the hospital contract out to bid — putting St. Joseph’s actions under closer scrutiny.
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“The action we’re taking to make Petaluma Valley a financially stable hospital is going to make the district’s decision that much easier,” said Petaluma Valley Hospital Vice President Jane Read. “It’s always difficult when you’re affecting people’s lives, but we’re doing it for the good of the community overall.”
Date: July 29, 2013