Valley Medical Group (VMG), a Greenfield-based independent, multi-specialty medical group with four health centers in the Valley, has laid off 41 employees, citing financial strains that have been years in the making.
For VMG, which employs 400 people across four primary care offices in the region, the layoffs mark a 10% reduction in its workforce.
VMG President and CEO Paul Carlan said that for decades the costs of providing health care have been “accelerating,” 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 remain open, Carlan said.
VMG 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.
The VMG president said the decision, made by senior leadership and VMG’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.”
VMG 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.
It 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, Carlan said. 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.
Faced with less support, VMG plans to “lean into” technology and AI 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,” said Carlan.
Carlan did not provide any details about VMG’s financial state, but said that, “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 VMG clinicians to remain independent while gaining access to care-management resources and data infrastructure 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, VMG was formerly part of Kaiser Permanente until becoming an independent, multi-specialty medical group in January of 2000. Services at the health center include primary care, eye care, physical therapy, behavioral health and laboratory and radiology.