Houston-based health system Memorial Hermann will cut 350 jobs, the organization announced Wednesday, citing escalating costs, declining reimbursements and a softened local economy.
The move is part of an overriding strategy to adapt to an uncertain healthcare environment by becoming more cost-efficient and consumer-focused, the organization said, adding that the cuts won't impact direct patient care. Memorial did not specify which of its 25,000 total employees would be losing jobs.
The news comes not long after Memorial Hermann's CEO Dr. Benjamin Chu abruptly resigned after about a year at the helm. He plans to transition to a public policy role.
Memorial Hermann is currently in the credit review process with both Moody's Investors Service and Standard & Poor's, but it does not expect the transition to lead to any material credit action, executives said.
"Our greater (credit) concerns rest with changing economic conditions in Houston, a result of the prolonged energy recession," Dennis Laraway, the system's executive vice president and chief financial officer, told Modern Healthcare last week.