Cleveland Clinic budget cuts will result in early retirements, possible layoffs

The Cleveland Clinic, the region's largest employer, is in the process of cutting $330 million from its budget for next year — a move that could result in an unspecified number of employee layoffs and thousands of early retirements.

As part of the cost-cutting measure, the Clinic, which posted about $6 billion in operating revenue last year, said it will offer early retirement plans to 3,000 eligible employees. The Clinic also is placing a stricter review on filling vacant positions and reducing its operating costs.

Eileen Sheil, a Clinic spokeswoman, said the cost reductions could result in employee layoffs after Jan. 1 once the system has a better idea of how well it has reduced costs. She said the health system will send early retirement offers to eligible employees by late October.

“If we don't take costs out, we won't be affordable to patients,” Sheil said. “That is really what this is all about.”

Earlier this summer, Crain's reported the Clinic employed 33,514 full-time-equivalent employees in a 15-county area in Northeast Ohio.

This isn't the first time the Clinic has moved to trim its work force. Back in 2010, the health system laid off roughly 200 employees in an effort to restructure its operations.

The Clinic isn't alone in its quest to limit the size of its operations, as hospitals across the country have axed thousands of employees in the face of reimbursement cuts, declining patient volumes and the looming uncertainty of the federal health care overhaul. Summa Health System and Akron General Health System reported layoffs in recent months. In late 2011, MetroHealth laid off 104 and eliminated 151 vacant positions.

Modern Healthcare, a sister publication of Crain's Cleveland Business, recently reported that hospitals averaged about 6,800 new jobs a month in 2012. So far this year, the monthly average has hovered at 875 new jobs. The U.S. Bureau of Labor Statistics logged about 33,000 new healthcare jobs in August, though only about 900 of those were at hospitals.

Cleveland Clinic budget cuts will result in early retirements, possible layoffs originally appeared on the website of Crain's Cleveland Business.