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Alameda Health System warns of large budget shortfall, plans 229 reductions in force; clinicians and unions demand rescission
Summary
Alameda Health System (AHS) leaders told the committee that federal and state cuts could reduce revenues substantially by 2028 and that AHS is pursuing a reduction in force affecting roughly 229 positions; dozens of clinicians, union leaders and community members urged the county to order rescission and scheduled a Billings & Hearings session for Feb. 25 to examine proposed service reductions.
Alameda Health System (AHS) executives briefed the Health Committee on the system’s financial picture and on an active reduction-in-force process affecting clinical and support staff, while dozens of clinicians, union representatives and community members urged the Board to rescind layoff notices and to convene a collaborative stakeholder process.
James Jackson, AHS chief executive officer, and Anne Metzger, vice president of finance (presenting for the finance team), summarized year-to-date results: they reported revenue gains in some lines but an unfavorable year-to-date expense variance of about $7.1 million driven primarily by labor costs, and higher-than-budgeted employee wages and benefits. Metzger said net patient revenue was above budget by $2 million while other expense lines produced an unfavorable variance. The presentation highlighted improvements in cash collection over recent years but noted a structural reliance on the system’s net negative balance (line-of-credit) to smooth seasonal shortfalls. The slides and discussion showed that the system’s line-of-credit mechanics and timing of state and federal reimbursements create recurring "dry" periods in early fiscal months.
John Mehta Schwartz, AHS director of reimbursement, described potential federal and state changes (referred to throughout the presentation as HR1 impacts) that could phase in over 2027–2028. He said staff estimates range widely by scenario; in one scenario the system might face $100–$150 million in annual revenue reductions by 2028 and that immediate, staged cuts could materially affect services. Mehta Schwartz also noted that the state’s rolling implementation timing and uncertainty about whether cuts will be delayed mean exact impacts remain uncertain.
On workforce actions, Jen (Jet) Chapman, AHS chief human resources officer, described the RIF process: the number of impacted positions had been presented as 247 earlier and was recalculated to 229; 73 employees accepted voluntary separation or incentivized retirement programs (31 voluntary resignations and 42 incentivized retirements). Chapman outlined the dates for notices and separations, bargaining with unions, and supports for impacted staff including severance packages, a recruitment/prioritization process for internal vacancies, an external website with resources, EAP counseling and training, and targeted recruiter support for rehiring where possible.
Labor unions and clinicians disputed parts of AHS’s presentation and called for immediate rescission of leave and layoff notices. Peter Masiak (SEIU East Bay), Nathan Gaines (neurology), Caitlin Bailey (emergency medicine) and many other clinicians said the rollout has been chaotic, that clinical leaders were not properly consulted, and that eliminating entire outpatient programs and positions will create patient-safety risks and higher downstream costs. Speakers provided examples—closed outpatient IOP/PHP behavioral health programs, eliminated phlebotomy in the ED, and threatened loss of specialty clinics—and urged the Board to order AHS to rescind notices and convene a stakeholder table to explore alternatives.
County counsel and the Chair confirmed the item was informational for the committee but scheduled a Billings & Hearings session (a public hearing required under Government Code procedures for reductions in service) for Feb. 25 to examine proposed service reductions (the required notice must list changes by facility, service, expected savings and affected people). Supervisors said they will review union submissions of potential offsets and explore options to mitigate impacts before final Board-level decisions.
What’s next: The Board will hold the statutory Billings & Hearings on Feb. 25 to review the proposed reductions in service and to hear stakeholder testimony; AHS and county staff indicated they will continue bargaining with unions and discuss options to reduce or mitigate layoffs.
Sources: AHS presentation (financials, reimbursement projections), CHRO RIF presentation, extensive public comment (item introduced at SEG 721; public comment continued through SEG 4112).
