Feeling Financial Squeeze, Hospitals Slash Jobs Across the Country

Flat reimbursements and escalating costs take their toll

Hospitals across the United States are trimming jobs amid financial pressures and fears about the direction that Republicans are steering health care policy, according to a report from STAT News. During the past month, hospitals in 10 states––from Kentucky to Minnesota to New Mexico––have announced plans for staff reductions. In the largest such move, prestigious Brigham and Women’s Hospital in Boston has said it will offer voluntary buyouts to 1,600 employees and may lay off staff later in the year.

Many other providers are eyeing cuts to clinical services, including labor and delivery, substance-abuse counseling, and psychiatric care, the STAT report says. Children’s Hospital Colorado, for example, is considering cuts to preteen psychiatric programs and telehealth services in response to state budget reductions. Methodist Hospital in Henderson, Kentucky, announced 61 layoffs earlier this month and closed a pediatric inpatient unit. Other hospitals have warned that they may shut down entirely as revenue shrinks and costs rise, according to the article.

So far, many “hospitals have been able to make cuts using a scalpel instead of an ax,” John Palmer, spokesman for the Ohio Hospital Association, told STAT. “But they’re running out of options.”

The financial problems that these job cuts reflect—flat reimbursements and escalating costs for salaries, medications, and supplies—are affecting a variety of organizations, from public hospitals serving poor urban populations to tiny rural providers to major academic medical centers, the STAT article notes.

Recent job reductions include:

  • In Silver City, New Mexico, the small Gila Regional Medical Center eliminated more than a dozen jobs, including several nursing administrators. The hospital no longer employs a chief operating officer.
  • Hennepin County Medical Center, a public hospital in Minneapolis, is cutting approximately 130 jobs, or 2% of its full-time staff, and administrators have said they may need to double the job reductions by the end of the year. The hospital lost approximately $11 million in 2016, partly because it serves a large number of uninsured and low-income patients.
  • MemorialCare Health System in Long Beach, California, laid off 131 employees earlier this year, citing an increase in Medicare and Medicaid patients and declining reimbursements from those programs.
  • Catholic Health Initiatives, one of the nation’s largest nonprofit providers, has said it will cut nearly 900 jobs through layoffs and buyouts. The cuts include 620 jobs at its hospitals in Texas and another 250 in Kentucky.
  • Another large hospital in Texas, the MD Anderson Cancer Center, said it will lay off nearly 1,000 employees after losing approximately $267 million in its last fiscal year.

In Washington, Republicans are still tinkering with their draft health care bill, which could cause 24 million people to lose insurance coverage during the next decade, according to an analysis from the Congressional Budget Office.

Recent amendments to the bill would allow states to opt out of mandates that require insurers to cover a defined package of benefits, including many services delivered by hospitals. That could saddle hospitals with millions more patients who cannot afford to pay their bills, according to the STAT article. The industry’s major lobbying arms, the American Hospital Association and the American Medical Association, have spoken out against the Republicans’ proposal.

Source: STAT News; April 30, 2017.