SSM Health Care Corp said it will be laying off 350 employees, or about one percent of its workforce. The St. Louis-based hospital also said an undisclosed amount of positions will be lost as a result of attrition. The permanent layoffs come following news the Catholic not-for-profit healthcare system needs to trim $200.0 million from its budget. The hospital’s operating income has taken a massive hit since it acquired the Saint Louis University Hospital in September 2015.
SMM Health Lays Off 1% of Total Workforce
SSM Health is laying off about one percent of its total workforce. According to the healthcare provider’s web site, it has more than 35,000 employees across four states. This translates into layoffs affecting more than 350 people.
The health system said the cuts are necessary to ensure “long-term sustainability.”
In addition to the 350+ layoffs, SSM Health said some additional positions will be lost to attrition.
“Like all health systems, we must continuously evaluate our operations to ensure we are providing services as efficiently and effectively as possible. As a result, we have identified some operational improvements necessary to better meet the needs of those we serve,” the statement said.
SSM Health is a Catholic-run non-profit health system with sites in Illinois, Missouri Oklahoma, and Wisconsin. SSM Health’s system includes 20 hospitals, 63 outpatient sites, comprehensive home care and hospice services, a technology company, a pharmacy benefits company, an insurance company, two accountable care organizations, and two nursing homes.
SSM Health’s Cost Savings Measures Continue Post-Acquisition
SSM Health has been facing financial challenges since acquiring Saint Louis University Hospital, a 365-bed academic medical center, in September 2015. The hospital was owned by Tenet Healthcare Corp (NYSE:THC), a Dallas-based for-profit healthcare system company.
At the time, SSM Health said it would be making a “significant investment” in the hospital. But that significant investment might have been too big; SSM Health’s acquisition of Saint Louis University Hospital is causing a huge decline in the healthcare systems operating income in 2016.
The hospital system posted operating income in 2016 of just $10.0 million. That represents a 95% decrease over the $229.7 million recorded in 2015.
To combat the financial malaise, SSM Health said it initiated “financial improvement plans” with the intention of cutting $200.0 million in costs in 2017. Despite the massive cuts, hospital officials did not elaborate on what the financial improvement plan was. However, they did say there were no plans to lay off any employees.
At the same time, SSM Health said it is looking to sell $500.0 million in taxable bonds, the proceeds of which will be used to retire $200.0 million in debt, while the other $300.0 million will be used for corporate purposes.
“SSM Health trims workforce by 1 percent,” St. Louis Post-Dispatch, November 8, 2017.
“About SSM Health,” SSM Health Care Corp, last accessed November 9, 2017.
“The deal is done: St. Louis University Hospital is now part of SSM Health,” St. Louis Post-Dispatch, September 1, 2015.
“SSM Health’s results sink on St. Louis hospital acquisition,” Modern Healthcare, March 31, 2017.
“SSM looks to trim $200 million from budget,” St. Louis Post-Dispatch, April 22, 2017.