Palomar Health Shares Financial Update and Announces Strategic Measures to Position for Long-Term Growth

SAN DIEGO, CA — November 28, 2024 — Palomar Health, California’s largest public healthcare district, announced a series of strategic measures that will allow the organization to remain flexible in the current economic climate while ensuring uninterrupted patient care delivery.

Audited financial results for Fiscal Year 2024, delayed due to a cyber event affecting Palomar Health Medical Group, are set to be released on November 27. These results are expected to reflect a financial loss for the health system, driven by external factors outside the hospital’s control.

In response, Palomar Health has implemented a comprehensive recovery plan focused on stabilizing expenses while creating a foundation for future growth. Key actions include streamlining leadership roles, engaging external experts to enhance operational efficiencies, optimizing contracts to align expenses with strategic priorities and realigning services to concentrate on core clinical areas where the health system can make the greatest community impact. In addition, Palomar Health has pursued revenue growth through strategic partnerships, including a collaboration aimed at enhancing service delivery and growing patient volume.

As part of these efforts, Palomar Health has reduced its workforce to ensure a successful financial pathway and to position the organization for a sustainable future in these challenging economic times. The impact was limited to roughly 2% of Palomar Health’s workforce, exclusively affecting leadership and back-office staff who are not directly involved with patient care. This reduction in force will not affect their patient-facing services or deter the organization from their commitment to providing world-class healthcare for those in need.

“This was a profoundly difficult decision that involved careful deliberation. These steps, while challenging, are necessary to stabilize our finances and prepare us for future growth,” said Diane Hansen, President and CEO of Palomar Health. “We are deeply grateful to those impacted for their invaluable contributions to our organization. I am confident that our team’s resilience and commitment to our mission will ensure we continue to deliver the extraordinary care our patients trust.”

Palomar Health remains committed to navigating this challenging period to emerge even stronger, ready to serve the growing needs of the community.