Adventist Health to restructure, lay off employees in cost-cutting effort

Adventist Health is consolidating its seven care networks into five and laying off administrative staff to cut costs and strengthen operations.

The faith-based nonprofit said its five networks will be Northern California, Central California, Southern California, Oregon and Hawaii. Chief Operating Officer Todd Hofheins said in a Wednesday news release the reorganization will reduce overhead costs, strengthen operational structure and help broaden the system’s geographical footprint.

Roseville, California-based Adventist, which has 23 hospitals and more than 350 clinics, recently entered into an agreement for Mid-Columbia Medical Center to join its Oregon State Network, pending regulatory and state approval. 

Adventist also is laying off 59 administrative employees, the system said in a Worker Adjustment and Retraining Notification Act notice filed with California Wednesday. Layoffs began this month and will continue into April, with affected positions ranging from administrative directors to project managers. Employees were given 60 days’ written notice of the pending cuts, according to the notice.

Adventist estimated the reorganization would save about $100 million but did not provide further details.

In July 2022, Adventist submitted a WARN notice of its plans to to lay off 52 employees.

Adventist reported a net loss of $637 million in the first nine months of 2022, according to its latest financial information. Revenue was up 4.4% year-over-year to $3.94 billion for that time period. Expenses increased 7.4% to $4.19 billion. 

It is the latest in a string of health systems looking to streamline operations in response to a challenging economic environment. 

Last year, Renton, Washington-based Providence condensed its seven regional divisions into three and cut executive positions. The nonprofit system attributed the change to financial challenges, including labor shortages, inflation, supply chain issues and limited insurance reimbursements. Also in 2022, Nashville, Tennessee-based HCA Healthcare shuffled its corporate structure, adding a third regional executive team to oversee five divisions starting this year, in contrast to other health systems cutting management layers. 

In January, Jefferson Health in Philadelphia announced it would consolidate its five divisions into three in an effort to streamline operations, also citing labor challenges and inflationary pressures.