800 Sutter employees accepted voluntary severance

Sacramento, Calif.-based Sutter Health, which saw a $321 million operating loss in 2020, has taken on several initiatives to improve its finances, including a voluntary severance program, according to an April 21 investor presentation.

To help cut operating costs, the health system initiated two voluntary severance programs last year. About 800 employees voluntarily left the organization after accepting the packages in 2020, Brian Dean, senior vice president and CFO of Sutter Health, said during the presentation.

An involuntary separation also occurred this year. The health system laid off 277 employees, mostly in IT.

As part of the financial recovery process, Sutter Health's management also is evaluating its existing footprint and service offerings to better meet demand. In the last several months, the health system has shuttered its neonatal intensive care unit at Sutter Delta Medical Center in Antioch, Calif., ended labor and delivery services at Sutter Solano Medical Center in Vallejo, Calif., and closed its 16-bed Menlo Surgical Hospital in Menlo Park Calif., Mr. Dean said.

In addition to eliminating labor costs and department closures, Sutter Health plans to continue to meter capital spending and assess projects to ensure they meet patient demand and are good financial opportunities for the health system. 

Sutter Health ended 2020 with a $321 million operating loss, including $800M in funding from the Coronavirus, Aid, Relief and Economic Security Act. Without the funding, Sutter Health's operating loss would have been $1.1 billion, Mr. Dean said. 

"We're obviously doing a full review of all our operations and financial performance … gaining daily that crystal ball of what post-pandemic life will look like," Mr. Dean said. "We are in recovery mode, we do have a long-term commitment to the communities we serve and our mission."

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