Oakland’s Alameda Health System canceled 92 planned layoffs after Alameda County supervisors approved $19.3 million in emergency funding.
The money, part of the county’s fiscal 2026-27 budget adopted June 25, will also pay for an outside performance audit and extend two behavioral health programs through October 31.
Funding averts cuts but deficit persists
The health system still faces a $100 million budget gap for the coming fiscal year. In November 2025, its board had approved reductions affecting 372 employees, anticipating federal funding changes under H.R. 1, a reconciliation law enacted in July 2025.
Voluntary departures, early retirements, and vacant positions had already reduced the layoff list to 120 full-time roles. The county’s allocation eliminates 92 of those cuts and temporarily preserves two behavioral health initiatives serving patients who need more support than traditional outpatient care but don’t require hospitalization.
Alameda Health System has stated the programs aren’t financially sustainable. A county-led review will determine by September 30 whether they can remain within the system or should be transferred elsewhere. If moved, the county will create a patient transition plan and assist the 28 affected employees in finding other county jobs.
The performance audit will examine the revenue cycle and other operations for potential savings. County officials said the review seeks to resolve disputes between leadership and labor representatives over how much additional money could be recovered through billing and collections improvements.
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Union calls decision a victory for workers and patients
Service Employees International Union Local 1021, representing many of the system’s employees, said 82 of the preserved positions belonged to its members. The union described the funding decision as a major win.
Alameda Health System runs four hospitals and nine clinics, including the East Bay’s only Level I trauma center at Wilma Chan Highland Hospital. Over 90% of its patients rely on subsidized care, and about 63% of its charges go to Medi-Cal.
The system’s financial challenges mirror those of other safety-net providers. Federal Medicaid changes are expected to increase uncompensated care, with some hospitals projecting revenue losses that could push them into negative margins. A 2025 study estimated 55 rural hospitals could face closure, while independent rural facilities were projected to lose $465 million in patient revenue during 2026.
The county’s funding provides temporary relief, but the underlying budget gap remains. The audit may reveal ways to reduce the shortfall, though long-term stability will likely depend on federal or state funding adjustments.
The two behavioral health programs, originally set for elimination, will continue until at least October. Their future depends on the county’s review and any additional funding that may become available.