The Santa Cruz County Board of Supervisors on Sept. 9 approved a limited continuation of the county’s in‑house radiology service while moving forward with plans to transition most clinical laboratory blood‑draw services to an outside provider. The board voted 4–1 to continue radiology through fiscal year 2025–26 using one‑time funds and to direct the Health Services Agency to pursue strategies to address productivity and revenue shortfalls and report back quarterly.

The vote followed a staff status report on staffing cuts and financial pressures in the county Health Centers division. Health Services Agency Director Connie Moreno Peraza told supervisors the agency proposed redesigning lab and X‑ray operations after a multi‑year pattern of rising operating costs and shrinking non‑county reimbursement. “We really tried to be as self‑sufficient as we can with our operating expenses,” Moreno Peraza said, describing the department’s reliance on Medi‑Cal infrastructure payments and other restricted safety‑net funding.

Chief of Health Centers Amy Peeler explained staff had targeted lab and radiology because both are essential to primary care and represent high operating costs relative to revenue. Peeler described a model under discussion in which Quest Diagnostics would provide specimen collection at county clinic sites and handle processing, while outside radiology providers would perform X‑rays and transmit results into the county electronic health record. She said Quest was recruiting phlebotomists and the agency had asked for service readiness by Oct. 1.

Labor representatives and clinic clinicians urged the board to find alternatives to staff reductions. Physician assistant Jason Johnston, who works in the county clinic system, said union proposals could increase revenue and expand services if the county implemented them, and warned of downstream public‑health costs from reduced access. SEIU staff and community advocates told the board that clinics serve vulnerable patients and that changes should be pursued collaboratively.

Supervisors who voted to continue radiology said the decision buys time for the new HSA director to work with staff and labor to pursue revenue‑generation and productivity improvements. Supervisor Justin Cummings made the motion; Supervisor Greg Koenig voted no, saying use of one‑time reserves to support ongoing services is risky given broader budget pressures. The roll call was DeSerpa — Aye; Cummings — Aye; Martinez — Aye; Koenig — No; Hernandez — Aye. The board directed staff to return at the next meeting with a plan to implement the motion and to provide quarterly updates.

Staff reported that, as of late August, 12 positions (11.6 FTE) tied to the planned reductions had been affected: six staff were placed elsewhere in county employment, one was seeking placement, two had retired, one resigned, and two are scheduled to be laid off Sept. 30 due to inability to place them. Staff said lab technicians had already substantially left their positions and one remaining technician planned to retire in September.

The board’s action separates discussion of laboratory and radiology: lab collection and processing will move toward a contract/space arrangement with Quest; radiology will remain in‑house for the fiscal year under one‑time supports while the agency tries to stabilize productivity and billing. Supervisors and staff emphasized this is an interim step and that larger budget and policy decisions will be required in coming months as state and federal changes to Medi‑Cal funding are implemented.

Ending: The board’s temporary preservation of radiology gives the new HSA leadership and labor partners months to pursue alternatives and try to improve clinic finances; if those efforts fail, the board said it will revisit funding and service decisions during the next budget cycle.