In an effort to save money, John Muir Health is launching something called a “Voluntary Separation Program” (VSP) for its employees, according to a letter sent out to employees by John Muir CEO Cal Knight.
This announcement by Knight comes just days after Claycord.com exclusively reported that John Muir Health was closing MuirLab, selling their outreach lab services throughout Northern California, and laying off hundreds of employees.
Below is the letter sent to employees regarding the VSP:
Dear Physicians, Staff & Volunteers,
As I have said in other communications, we will continue to be on a path of change and adjustment for the foreseeable future. It is the reality of the health care environment that all hospitals and health systems are facing. Patients and employers are increasingly making health care choices based not only on quality, but cost as well.
Our quality continues to be excellent, but you likely hear the same concerns from patients, friends, family and community members as I do about health care costs in general, and John Muir Health’s in particular. We are taking various steps to lower our costs so we can continue to serve future generations of patients with the excellent services that we are known for. Our efforts to become more affordable are not to erode our culture of excellence; they are to ensure patients can continue to access us for their care.
Voluntary Separation Program: It is in this context that we are launching something new, known as the Voluntary Separation Program (VSP) as part of our STRETCH program. This week, all benefit-eligible employees will receive a letter and information in the mail about VSP. We are initiating this program as an alternative to the blanket, across the board layoffs that are consistently happening with other health systems both regionally and nationally. Unlike those types of layoffs, VSP is very much in keeping with John Muir Health’s values of integrity, respect and compassion. The same severance and financial package described below as part of VSP is also being offered to MuirLab employees if they are not able to find a job with LabCorp or John Muir Health.
How Does it Work? Benefit eligible employees, who have worked here for at least 90 days and have .5-1.0 FTE status, may apply for a voluntary separation from the organization and, if their application is accepted, will receive basic severance and an additional financial payment for exiting the organization before 2014. Acceptance of applications will be based upon the business needs of the organization in keeping with our mission of improving the health of the communities we serve with quality and compassion.
Applications are most likely to be accepted from employees in positions that would not need to be replaced after the VSP, employees working in departments where a significant amount of flexing has been occurring or employees working in departments where FTE reductions will be budgeted for 2014. I would encourage you to speak with your director about whether your department falls under that category. If your application is not accepted, it means that we continue to need your services and would have to replace your position if you left and/or it is a hard position to recruit for.
Maintaining Quality: This year, we are well on our way to meeting our $20 million STRETCH target and have done so without sacrificing quality, safety or the patient experience. Working as a team, all of you are responsible for stellar awards from U.S. News and World Report, HealthGrades, the California Association of Physician Groups, The Joint Commission and many others. Our patients recognize the quality that we provide and it is one of the reasons they come here, but they are also looking for value as they often have to pay more out of pocket for their care. We have made great strides to lower our cost, but we must do more.
Benchmarking Ourselves: As part of STRETCH, we compare ourselves to other hospitals and health systems locally, regionally and nationally that have similar recognitions for quality as John Muir Health. Results indicate that our staffing is higher than more than 75 percent of these hospitals and health systems, which means they are delivering quality care, but at a lower cost. In this new health care environment, our current costs are not sustainable in the long run. So our goal is to be closer to the 50th percentile over a few years. We are taking a measured, thoughtful approach to lowering our costs rather than conducting an across the board layoff. We think the VSP will create a more sustainable result.
We have departments throughout the health system that already benchmark very well, and other areas where we have opportunities to improve and find savings. Our goal is to approve VSP applications in those areas where the benchmarks show an opportunity to reduce costs (and we will be less likely to accept applications in those areas where we already have the right number of employees).
Stewards of John Muir Health: As we look ahead to 2014, our labor improvement target grows to $32 million, which is why we are initiating the VSP. We need to meet that target to help us get our costs in line, work with health plans to offer more affordable options that will give patients access to John Muir Health and ensure we can continue to serve our community.
We are all stewards of this organization and responsible for its future. In communicating with you about STRETCH, affordability, MuirLab and other initiatives, I hear concerns that John Muir Health’s focus on affordability could have a negative impact on patient care. These are challenging issues, but I want to assure you that our focus will always be on providing the absolute best possible care and patient experience. We must take proactive steps to preserve our ability to deliver great care in the midst of growing patient concerns about health care costs and the most profound changes to health care in decades. Given that responsibility, we will make decisions, sometimes difficult ones, to maintain our short- and long-term ability to fulfill our mission and serve the community. That said, our mission will always be outstanding care for the patients we serve.
Understandably, the VSP program will generate, and other recent changes have already generated, a good deal of internal discussion. We will have open forums to further discuss the program and any other issues you might have questions about as part of our commitment to be open and transparent with you.
We have an incredible group of physicians, staff and volunteers. Together we will successfully navigate the challenges we face for the benefit of our patients and to continue our legacy of excellence.
President and CEO