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SVMHS Proposes Plan to Manage Costs


Media Contact: Karina Rusk 831-759-1843

SVMHS Proposes Plan to Manage Costs, Respond to Changes in Healthcare
Hospital Leaders Focus Efforts on Improved Care Models

SALINAS, CA, August 25, 2014 – Salinas Valley Memorial Healthcare System (SVMHS) is building on a proposed strategic plan it has shared with employees to strengthen the Healthcare District and position SVMHS to meet the long-term needs of the communities it serves.

The reorganization proposal modernizes and updates the patient care model at SVMHS. It also results in the difficult and unavoidable proposal of a reduction in the workforce. The proposal could affect as many as 120 staff members. SVMHS hopes to minimize the impact through attrition and separation incentives.

“Our ability to improve and expand patient care requires us to reduce costs while continuing to focus on quality during a time of unprecedented changes in the healthcare industry,” says president/CEO Pete Delgado. “After thoughtful consideration, we are pursuing a direction that is right for the organization, our patients and the staff as a whole.”

One element of the proposed reorganization is to increase the number of full-time nursing positions in relation to part-time positions. Currently 75 percent of SVMHS registered nurses work part-time, which drives additional administrative and benefit costs. Part time employees working 2.5 days a week qualify for the same health benefits provided to full-time employees. The proposed job reductions do not change patient care staffing or reduce nursing hours at the bedside.

“Our proposed shift from part-time to full-time nursing would enhance patient care with greater continuity, efficiency and staff engagement” says Chief Nursing Officer Christie Gonder.  

The strategic plan calls for important improvements throughout the hospital that include creating specialty care areas, providing more private rooms and reorganizing clinical areas by floor location and department.

The proposal also seeks to put into place a sustainable cost structure, especially as it relates to employee benefits that have been identified as significantly higher than industry standards. The good faith bargaining ongoing since February allows for a respectful dialogue and exchange of information with union leadership.

Information and details surrounding negotiations with CNA can be found on a website designed to keep nurses and the community informed

Despite several years of operational challenges, Salinas Valley Memorial has made significant progress in the past year strengthening its finances and delivering superior care in a community setting.  Included among the system’s awards and honors are special recognition by:

  • The Joint Commission, which included SVMHS among the nation’s  “Top Performers” in 2013 in care for heart attacks, heart failure and pneumonia.
  • Health Grades, which listed SVMHS in the nation’s Top 5% for treatment of stroke, plus special honors for outstanding care in neuroscience, orthopedics, neurosurgery, pulmonary, gastrointestinal and critical care.


Fact Sheet

SVMHS began formal talks with the California Nurses Association (CNA) in February and to date have reached 26 tentative agreements toward renewal of the Collective Bargaining Agreement. The contract was originally set to expire March 9, 2014, and is currently extended through September 9, 2014. Under the proposed restructuring of full time and part time nursing, presented to CNA last week, as many as 54 positions in the bargaining unit could be reduced.

Human Resources notified NUHW last week that the proposed reorganization could impact as many as 63 positions in the bargaining unit.



Several years of double digit pay increases since 2000 have resulted in nurses at SVMHS achieving a pay rate well above the national average, Bay Area and local market.

The average SVMHS full and part time nurse’s pay is $147,000 per year with a minimum starting wage of $49.05 and a maximum wage of $88.43 (or $183, 934 annually). It is important to note, the proposal on the table does not reduce the pay rates for current RNs and is intended to only slow the rate of pay increases to ultimately achieve competitive pay that is no longer at the high end of the market.


Health Care Benefits

SVMHS is proposing a redesign of employee health care options, the costs of which would be phased in over a four-year period. The redesign will still include a zero contribution option for all full and part time employees and a $3,000 limit on out of pocket expenses for services provided by physician’s and facilities outside SVMH’s preferred network.

According to the 2013 Kaiser Family Foundation Benefit Plans Survey, the average monthly employee premium cost share for a PPO plan is 17% ($141.76) for single coverage and 26% ($526.53) for family coverage.

Currently, SVMH employees pay $0.00 (0%) for single coverage and $86.67 (4.3%) for family coverage. [NUHW PAYS LESS at $0 single / $24.07 family]


Paid Time Off

Paid Time Off (PTO) for nurses now tops out at 46.5 paid days off a year – over 9 full work weeks for those employees with the most seniority (29 years and above). At that level, the SVMHS RN PTO plan provides a maximum accrual of 744 hours. By comparison, the CNA contract at County of Ventura hospital has a max of 600 PTO hours, 500 hours Eden Medical Center, 440 hours at Antelope Valley Healthcare District, 320 hours at California Pacific Medical Center and 320 hours at Enloe Medical Center.

SVMHS has proposed to reduce the rate at which employees earn PTO going forward, not take away earned time in an employee’s PTO bank. Under the proposal, which would be phased in over three years, nurses with the most seniority would still earn 39 days (eight weeks) and nurses with 6-14 years of service would still earn 25.5 days (five weeks) of PTO each year, while maintaining the current sick time accrual rate of 15 days a year.


Next Steps

The elements of the strategic vision will be rolled out in a thoughtful, measured approach to achieve success and enhance the patient experience. Many of the desired components of the restructuring plan will be negotiated through good faith bargaining now underway.

Information and details surrounding negotiations with CNA can be found on a website designed to keep employees and the community informed 

Base Wage Comparison

Benefits Comparison
CNA Salaries
Current Medical Plan
Proposed Medical Plan

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