Aug. 12--Kaiser Permanente eliminated 1,850 jobs in California on Tuesday, serving notice that the recession is sickening the health care industry at long last.

About 1,200 jobs will vanish in Northern California, although the actual number of layoffs could be reduced by a buyout program. The job losses in Sacramento could be in the hundreds, said spokesman Pete Janhunen of SEIU United Healthcare Workers-West, although he said that figure could change significantly.

Kaiser wouldn't provide details on where the jobs are being cut, but said the numbers will amount to about 2 percent of its Northern California work force.

Kaiser employs about 8,000 workers in the Sacramento area.

The news came a week after Kaiser said second-quarter profits jumped 75 percent, to $620 million. But income from day-to-day operations actually fell by 18 percent. The Oakland health care giant warned that its subscriber numbers are falling -- and it's bracing for a decline in Medicare reimbursements from the U.S. government, as well as the impact of proposed national health care reform.

Job cuts have hit the health care sector in recent months, with about 100 or so jobs apiece being trimmed at Sutter Health and Health Net Inc. in the Sacramento area. Kaiser itself cut 700 data-center jobs in California earlier this year. The state lost 1,900 health care jobs in June, or 0.1 percent of the total.

But the sector has still recorded a net gain of nearly 20,000 jobs in the past year -- and has been largely immune to the big job losses that have hit the rest of the economy. It is just about the only major industry that's added jobs during the recession.

That might be changing. As employees in other industries get laid off and lose employer-paid health insurance, that means fewer subscribers for Kaiser, said Joanne Spetz, a health care economist at the University of California.

Kaiser said its subscriber rolls dropped by 36,000 in the first half of the year, to about 8.6 million.

"They have fewer enrollees, they have fewer people to take care of, they don't need as many workers to take care of people," Spetz said.

Kaiser spokesman Marc Brown said the cutbacks will mainly affect housekeepers, pharmacy technical clerks, medical transcription secretaries, information-management clerks, and business office employees.

"These actions will not result in reductions in the level of service and quality care we provide our members and patients," senior vice president Gay Westfall said in a prepared statement.

Westfall said the latest cutbacks come in addition to earlier moves, including delays in merit pay raises for nonunion workers and a scaling back of capital spending. Brown said a new hospital in Vacaville, set to open last spring, has been delayed until October.

In announcing the job eliminations, Westfall also cited national health care reform, but did not elaborate on Kaiser's specific concerns about the plan still taking shape in Washington. Spetz said Kaiser might be worried about competition from a government-sponsored health insurance plan, a key element of President Barack Obama's proposal.

"They might think they might lose some market share to that," Spetz said. "But health reform has not really been defined. ... Nobody really knows what health reform is."

Because of a recently negotiated voluntary buyout plan, it's possible there will be few, if any, forced layoffs if enough workers agree to buyouts, Janhunen said. Still, he said the union is frustrated that positions will be eliminated.

"They made $620 million last quarter," he said.

------

Call The Bee's Dale Kasler, (916) 321-1066. Read his blog on the economy, Home Front, at www.sacbee.com/blogs.

-----

To see more of The Sacramento Bee, or to subscribe to the newspaper, go to http://www.sacbee.com/.

Copyright (c) 2009, The Sacramento Bee, Calif.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:HNT,

A service of YellowBrix, Inc.