Winchester, Va.-based Valley Health is making operational changes across its six hospitals, including transitioning physician management and closing a unit, amid financial pressure tied to House Resolution 1.
The system will transition emergency physicians and hospitalists to SCP Health, ending contracts with Emergency Medicine of Blue Ridge and Sound Physicians, a spokesperson told Becker’s. SCP Health will assume emergency physician management Sept. 30 and hospitalist management at the start of 2027.
Valley Health said consolidating emergency and hospitalist services under one group is intended to improve coordination, align clinical and operational goals, and enhance patient throughput. The changes are tied to about $80 million in annual lost revenue from Medicaid reimbursement cuts and are expected to generate more than $1 million in monthly savings.
Valley Health will also close the observation unit at Winchester Medical Center, the system’s flagship hospital, on July 1, with patients instead receiving care in inpatient rooms.
“This decision reflects our responsibility to ensure Valley Health remains strong and sustainable for the communities we serve,” President and CEO Mark Nantz said in the release.
The health system said it expects most current physicians and advanced practice providers to continue practicing under the new structure, and observation unit staff will be transitioned into other roles. Emergency departments will remain fully operational during the transition.
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