Valley Medical Group, a Greenfield-based, multi-specialty medical group with four health centers across the Pioneer Valley, has laid off 41 employees, citing financial strains that have been years in the making.
The layoffs mark a 10% reduction in Valley Medical Group’s 400-person workforce. President and CEO Paul Carlan said the costs of providing health care have been “accelerating” for decades and the layoffs reflect increasing challenges.
Inflation since the pandemic, decreases in funding for Medicaid and rising prices for private health insurance are all factors that have impacted the medical group with health centers in Amherst, Northampton, Easthampton and Greenfield. Those centers, that together care for 50,000 people, will all remain open, Carlan said.
Valley Medical Group also works in primary care, one of the most underfunded branches in health care, making up some 5% of total investments in health spending, Carlan said.
He said the decision, made by senior leadership and Valley Medical Group’s board of directors, was strictly financial.
“This was a painful decision for us to make. Each and every one of the employees was an important part of the work we do, and we will miss them,” he said. “And in fact, we hope there are opportunities to work with them again.”
Valley Medical Group leadership notified employees of the pending cuts by email before final decisions were made on Jan. 21, and stated that affected employees will continue receiving pay and benefits until Jan. 31.
“For those affected by the reduction in force, we apologize and take responsibility for this truly sad outcome,” the email stated.
The email went on to say that, “While no departments or health centers have been eliminated, consolidation and other changes are planned in several areas of our business. Positions were selected using objective criteria to maintain clinical care and business operations. In some instances, employees were offered internal transfers. We are sorry these layoffs have proved necessary. These decisions do not reflect the value and the dedication of the individuals affected.”
According to the email, additional layoffs are not anticipated.
“While we won’t offer empty reassurances, please know we have no plan or desire for additional reductions in staffing in the future,” the email stated.
No practitioners were impacted by the layoffs, according to Carlan. Positions cut include nurses, educators, receptionists, referrals specialists, administrators, managers, custodial workers and couriers.
“The people who see patients, whether they be physicians, nurse practitioners, physical therapists, behavioral health clinicians — those folks are still taking care of patients, but we do have less support,” he said.
Valley Medical Group plans to “lean into” technology and artificial intelligence to compensate for a smaller workforce. “We will be more efficient. We have plans in place to try and improve how we handle patient calls and messages, and protocols to refill medications. I think that will help,” Carlan said.
Carlan did not provide any details about Valley Medical Group’s financial state, but said, “We believe this workforce reduction positions us to weather the next 18-24 months while we await improved financial performance from our new insurance contracts and better population health outcomes from our partnership with Arches IPA.”
The partnership with Arches IPA, an independent practice association based in Massachusetts, will be a key tool to regaining financial stability, Carlan said. The partnership will allow Valley Medical Group clinicians to remain independent while gaining access to care-management resources and data infrastructure that is typically only available through large health systems. Arches IPA also specializes in value-based contracts, which charge patients not for the volume of their services, but for the effectiveness of the care they receive.
“In the long run, this will benefit everyone,” he said.
Originally formed from the merger of Amherst Medical Associates and Pioneer Family Physicians, Valley Medical Group was formerly part of Kaiser Permanente until it became an independent, multi-specialty medical group in January 2000. Services include primary care, eye care, physical therapy, behavioral health, and laboratory and radiology.