Oakland’s Alameda Health System has canceled 92 planned layoffs after Alameda County supervisors approved $19.3 million in one-time funding for the public health network.
The allocation, finalized in the county’s fiscal 2026-27 budget on June 25, eliminates the July 6 layoff notices. It also pays for an outside performance audit and extends two behavioral health programs through October 31.
Alameda Health faced a $100 million deficit for the coming fiscal year, as outlined in a June 22 letter from county supervisors. In November 2025, its board had approved cuts affecting 372 employees due to anticipated federal funding changes under the 2025 reconciliation law H.R. 1.
Voluntary departures, early retirements, and vacant positions reduced the list to 120 full-time roles. Twenty-eight of those were linked to a partial hospitalization program and an intensive outpatient program. The county funding preserves the remaining 92 jobs and keeps the two behavioral health services operational for four more months.
These services assist patients who need more support than traditional outpatient care but do not require hospitalization. Officials have stated the programs cannot remain financially viable without external assistance.
The county health director will conduct a review to determine by September 30 whether the programs can continue within the health system. If not, officials will identify alternative providers, develop a patient transition plan, and help the 28 affected employees apply for other county positions.
Related: Sentara Health Creates AI Training Program
The $19.3 million also covers an independent audit of the system’s revenue cycle and operations. County officials say the review will resolve disputes between management and labor over potential additional revenue from improved billing and collections.
Alameda Health 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 charges go to Medi-Cal.
Service Employees International Union Local 1021, which represents many workers in the system, called the funding decision a significant win. The union noted that 82 of the saved positions belonged to its members.
Public health systems have prepared for broader impacts from federal Medicaid changes. Similar safety-net providers in other states have warned that coverage losses could double their uncompensated care costs, shifting operating margins from positive to negative.
An analysis last year predicted 55 rural hospitals might close in 2026. Independent rural facilities were expected to lose $465 million in patient revenue.
The county’s temporary funding provides breathing room. However, the system’s long-term stability depends on whether the audit reveals enough savings to address the remaining shortfall.