Memorial will cut staff by 5 percent

Memorial Medical Center confirmed Friday that the hospital is going through a restructuring that will result in a 5 percent staff reduction.

The 423-bed hospital at Coffee Road and Briggsmore Avenue is expected to shed about 150 employees as it deals with a changing insurance landscape and economic realities. The hospital is a major employer in Modesto, with about 2,900 employees.

A Memorial news release said the staffing cuts will be made across the different departments in the hospital.

"Memorial Medical Center is committed to providing quality, affordable, safe patient care for our patients as cost-efficiently as possible," said Daryn Kumar, chief executive officer of Memorial. "We have our priorities in place to keep that commitment, which include increased engagement with our employees and physicians, reduction of operating costs, optimization of technology and growth in strategic services."

The hospital, affiliated with

Sacramento-based Sutter Health, divulged some information in a news release but declined to discuss the staff reductions in more detail. It did not disclose the exact number of employees to be affected.

The hospital said employees will receive updated information in mid-November. It is obligated to give 60 days' notice to workers who will lose their jobs.

Kumar said in the news release that Memorial has seen a decrease in patients this year and a steep decline in payments from insurers for hospital services. The hospital cited published reports that medical centers in the region have seen an 8.6 percent decline in patient discharges over the past two years.

Among the realities facing the hospital is a decline in people who carry insurance and a growing trend toward health plans with higher deductibles, causing more patients to delay or forgo elective surgeries and other treatments.

In the past several months, the medical center has reduced and managed operating expenses, adjusted staffing schedules and temporarily closed units, the news release said.

Some Memorial employees will be affected when Sutter Health opens an administrative services center in Roseville early next year, creating a central service hub for finance, billing, human resources and other nonpatient services. Those functions have been handled at dozens of Sutter facilities from the Central Valley to the Bay Area.

Sutter said preference will be given to current employees for the jobs in Roseville, but it expects that some workers won't choose to relocate.

Modesto obstetrician Harvey Palitz said most hospitals and medical practices are seeing a decrease in patient volume. "Some of it is because people are going to high- deductible plans and they are avoiding health care," he said. "It's also due to the economy and the fact that everyone is trying to cut the number of dollars that goes into health care."

Jeff Rowe, director of Alliance Worknet, said the agency will talk with Memorial about services to help affected workers find other jobs.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.