North County

Palomar Health Eliminates 317 Positions Due to Financial Strain of Pandemic

Palomar Health says the laid-off workers will receive a severance package and will be immediately eligible for unemployment and health insurance coverage through their severance period

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Palomar Health is eliminating 317 positions, about 5 percent of its workforce, due to lost revenue caused by the COVID-19 pandemic, it announced Tuesday.

Effective Wednesday, 50 bedside clinicians and 267 positions will be eliminated to "ensure the organization can continue providing healthcare to North San Diego County residents now and in the future," according to Palomar Health spokesperson Derryl Acosta.

Palomar Health confirmed 70 of those positions were open positions and 98 were per diem positions.

Palomar Health attributed the layoffs to the financial strain caused by the COVID-19 pandemic, saying it saw a 45 to 50 percent decrease in patient visits throughout its health care system.

That decrease resulted in a $5.7 million operating loss in March and Palomar Health expects April's numbers to be even worse. Further cost-cutting measures include canceling or delaying capital projects, putting strategic initiatives on hold, and canceling all non-essential spending within the organization.

As for the laid-off employees, Palomar Health says they will receive a severance package and will be immediately eligible for unemployment and health insurance coverage through their severance period.

San Diego County gave the green light last week to hospitals to begin performing elective procedures if the facility's resources can handle it.

Palomar Health also says it will resume surgical procedures based on the availability of personal protective equipment and virus testing, but the loss of revenue from shutting down elective surgeries for the past six weeks cannot be recovered quickly.

It expects some patients may lose their health insurance due to coronavirus-related unemployment and will delay surgeries until they have the financial means, adding to the system's projected revenue losses.

“These are extremely tough decisions that are taken very seriously because we know they affect the livelihood of our employees,” said Palomar Health President and CEO Diane Hansen. “However, the sooner we make these tough decisions, the sooner we will be able to stabilize our business and get back on the road to recovery. It is our responsibility to ensure Palomar Health provides high-quality medical care to our community during and after this pandemic.”

Palomar Health is anchored by three hospitals in North County, two that provide acute care services and one specialty hospital.

A federal 202-bed emergency overflow medical facility -- which will not be used unless the county's resources are stretched too thin -- opened last week and occupies two formerly vacant floors at Palomar Medical Center in Escondido.

Editor's Note: A previous version said 317 workers would be laid off. Palomar Health confirmed 70 of the positions were open positions.

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