Memorial Hermann Health System Laying Off 350 Employees
Memorial Hermann Health System, the operator of more than a dozen hospitals and numerous specialty healthcare centers in Texas, has announced that it will be cutting 350 jobs in order to reduce its escalating costs. The latest round of layoffs accounts for less than two percent of the health system’s total workforce employed across the state.
This is the second time in less than a year that layoffs have been announced by the health system, which happens to be the largest not-for-profit chain of hospitals in southeast Texas.
Earlier this year, the hospital system slashed 112 jobs, mostly in management. Therefore, the total number of layoffs in the first half of this year has now crossed the 460 mark.
The layoffs were announced just a week after Memorial Hermann’s CEO, Benjamin Chu, made an unexpected departure from the health system.
Revenue Declining at Hospital Due to Affordable Care Act
The president of Memorial Hermann Health System, Chuck Stokes, has confirmed that the layoffs will not directly affect patient care. He also said that the layoffs became necessary in order for the health system to cope with rising costs per patient.
In addition, the hospital has also been facing shrinking revenue. This is because of declining insurance reimbursements, due to the more stringent reimbursement criteria, which was revised under former President Barack Obama’s Affordable Care Act.
The company resident said that the hospital system is trying to adapt to the “new normal” in the healthcare sector. He points out that the healthcare environment has become increasingly uncertain.
Politics have caused an air of uncertainty around the future of healthcare in America. The Trump administration has been trying to repeal and replace the Affordable Care Act with its own legislation. The Republican-dominated U.S. Senate has drafted a bill to cut federal spending on the Medicaid program, which would further hurt hospitals across the country.
The cuts to Medicaid spending would cause insurance reimbursements to further dip. Many Americans covered under the program will not be able to pay for their costly medical bills, thus causing the healthcare cost per patient to increase manifold. Rising costs and falling revenue are expected to force many hospitals to lay off staff or decrease hours of operation.
In an e-mail sent to Memorial Hermann’s internal employees, Stokes said, “We continue to face an uncertain healthcare environment with escalating costs and declining reimbursements. In addition, we are impacted by a softened local economy.”
The Houston-based Memorial Hermann employs about 25,000 employees across the state and is the largest employer in the city.
“Memorial Hermann lays off 350 more employees,” Chron, June 28, 2017.