Sutter Health, known for its progressive approach to information technology, has cut 121 IT employees, including some who support Sutter's electronic health record.

Officials at the Sacramento, Calif.-based health system blamed the continuing economic downturn when they announced the cuts on Monday.

The employees, who received a two-month notice, will be laid off on July 17. All are based at the information services facility in Rancho Cordova, Calif. Sutter Health hospitals and physician organizations continue to employ about 1,500 IS staff in Sacramento and the region, executives said.

A number of the terminated positions support Sutter Health's electronic health record, but officials did not specify how many. Sutter recently launched its first hospital-based EHR in Burlingame, Calif., but has placed hospital-based installations on hold until sometime after 2009 and doesn't plan to accelerate the completion of its EHR rollout to affiliated physician organizations, where approximately 80 percent of healthcare services are delivered.

"This decision was one of the most difficult I've ever had to make," said Sutter Health CIO Jon Manis. "These are dedicated and talented professionals who have provided tremendous value to our organization. Unfortunately, these staffing changes are necessary. We have a higher responsibility now more than ever to our patients who pay for healthcare to be good stewards and to keep our services affordable."

Manis said Sutter decided to release employees affected by staffing reductions to give them the next two months paid, before severance benefits begin, so they can focus on finding new jobs. The employees also will receive payment of health coverage premiums and job placement services for the duration of their severance.

Sutter has implemented the EHR in five of its eight affiliated physician organizations (medical foundations), connecting more than 2,000 physicians in the coordinated care of patients across much of northern California. The EHR encompasses information about the care of more than 1 million patients. More than 200,000 patients are accessing their personal health records online.