What happened? Executives blame Medicare cuts, the Patient Protection and Affordable Care Act and declining patient volumes.
Excela Health in Greensburg, Pa., announced a plan to cut 140 jobs, consisting of about 80 layoffs and leaving another 60 posts unfilled. Last month, NorthShore University HealthSystem in Evanston, Ill., announced it would eliminate 130 positions, or 1% of its workforce. PeaceHealth, a system based in Bellevue, Wash., announced 500 job cuts as part of a plan to slash its budget by $130 million.
Hospitals have long vowed to avoid thinning the ranks of workers who directly deliver patient care. That means housekeepers, janitors and other support workers are most vulnerable.
“We had some really nice patient support services, such as valet parking,” said Carol Aaron, senior vice president for people and culture at PeaceHealth’s office in Vancouver, Wash. “But obviously, when talking about cuts, that was one that needed to go away.”
PeaceHealth attributed its workforce reduction to the termination of its 15-year-old service contract with Kaiser Permanente to cover enrollees treated at Vancouver’s PeaceHealth Southwest Medical Center.
Many hospitals, though, are saying that it’s the healthcare reform law that forced their hands. A memo that NorthShore officials sent to employees, for example, explained the cuts as needed to ensure the system is “well positioned to deal head on with the unprecedented changes brought on by the Affordable Care Act.”
Hospital leaders are indeed under tremendous pressure to be more efficient, said Dr. Andrew Ziskind, managing director of Chicago-based Huron Consulting Group’s healthcare practice.
But there’s more to it, Ziskind said. The pattern is closely aligned with broader changes in the healthcare delivery model and growing emphasis on outpatient care. It also reflects advances in labor-force management, he said. “It would be an oversimplification to say this is solely due to the ACA.”
A 6% decline in patient volumes led Excela Health to cut staff in Western Pennsylvania. Outpatient services haven’t seen enough growth to compensate, said Michael Busch, executive vice president and chief operation officer for Excela.
Quality and safety metrics have had a surprising effect on which jobs Excela officials retained, Busch said. While support staff in the past made easy targets, housekeeping and janitors help keep infections in check, which lead to higher scores.
Smaller community hospitals say they’re scaling back to survive. Clifton Springs (N.Y.) Hospital and Clinic, a free-standing 212-bed facility in Central New York, eliminated about 100 positions earlier this year, blaming a downturn in patient volume, uncertainty posed by the reform law and acquisitions of physician practices by its larger competitors. The number of jobs eliminated, said interim Chief Financial Officer Sharon Kelley, “was determined by what we need to ensure future survivability.”
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