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Salinas Valley Memorial Announces Cost Reduction Plan

SALINAS, CA, December 10, 2010: In an effort to contain costs and to make healthcare affordable and accessible to the central coast community, Salinas Valley Memorial Healthcare System announced today that it is implementing an organizational redesign that will include workforce reduction as well as a variety of other measures.

The move is part of Salinas Valley Memorial's leadership effort to embrace the new realities of healthcare and position itself to continue to thrive in the changing healthcare landscape. Issues that are rapidly impacting healthcare for hospitals across the country include pending healthcare reform, lower government reimbursements for Medicare and Medi-Cal, and more uninsured patients that result in unreimbursed care provided by hospitals.

Salinas Valley Memorial will reduce its workforce by approximately 5 to 6 percent by the end of the year. "We very much regret that people will be losing their jobs this month," said Sam Downing, President/CEO of Salinas Valley Memorial. "Decisions such as this are among the most difficult that we have to make, but in this case the decision was necessary to ensure the strength and viability of Salinas Valley Memorial." Career counseling services will be offered to affected employees.

Salinas Valley Memorial is undergoing an organizational redesign focused on quality, cost and service. Over the past couple of years, voluntary buyouts and attrition have resulted in a workforce reduction throughout the organization. Eliminated nursing positions account for less than 2% of the staff at Salinas Valley Memorial. "We have a commitment to quality patient care, and in every case we either meet or exceed the nursing ratios mandated by the State of California," Downing said.

Salinas Valley Memorial works with 3 unions—California Nurses Association representing approximately 665 nurses; National Union of Healthcare Workers representing approximately 780 employees, including unit assistants, clerical workers, IT, housekeeping, environmental and nutrition services among others; and International Union of Operating Engineers, Stationary Local 39 representing 33 engineering employees.

In an effort to limit the workforce reduction, Salinas Valley Memorial currently is examining opportunities for other efficiencies and cost reductions. Areas of savings include renegotiating contract terms with vendors, reviewing supplier assignments, process improvements, etc.

This work will result in the sustainable long-term outcomes needed to maintain Salinas Valley Memorial's mission in the central coast region. "By proactively addressing the issues presented in today's health care environment, we will be able to continue to fulfill our responsibility to the communities we serve, by providing access to quality patient care at affordable costs," Downing said.

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