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Management jobs take hit

Hospitals slice management roles to balance budgets

Topics: Leadership, Workforce, Staffing, Labor Expense, Recession/Downturn, Market Trends, Strategy

August 31, 2011

As hospitals grapple with major reimbursement cuts and uncertainty created by the implementation of the federal health reform law, officials increasingly are eliminating management positions to balance budgets.

  • One Virginia-based health system this month cut 117 senior and mid-level management positions, or 13% of its management team. Eighty-four positions were eliminated through attrition and 33 through layoffs. However, physicians and nurses directly involved in patient care were not affected.
  • A Kentucky-based hospital is cutting 155 jobs less than two years after cutting 500 positions, citing decreased health care utilization and market trends. The organization says its nurse-to-patient ratio will be unaffected by the cuts and one-third of the positions were already vacant.
  • A slew of New Hampshire hospitals have sliced staff in the wake of state Medicaid cuts.

Cuts about current challenges, fear of future pain

Noting that "[m]any hospitals are clearly feeling cost pressures," the director of public information at the Center for Studying Health System Change, says "[s]tates are already cutting Medicaid rates and reductions in the growth of Medicare payment rates are coming, so it's not surprising that hospitals are squirreling away nuts for the winter."

According to a spokesperson at the Virginia system that cut staff, the decision was a response to economic challenges but also "anticipated changes (as well as unknowns) within the health care reform environment." He notes that the cuts are intended to reduce bureaucracy between senior managers and patients. "By streamlining our management teams, we anticipate improved communication and more efficient decision making/implementation with respect to patient care," he says (Daly, Modern Healthcare, 8/26 [subscription required]; AP/Post, 8/26; Sun, "Breaking News Blog," Post, 8/25; Rau, "Capsules," Kaiser Health News, 8/25; Ungar/Howington, Louisville Courier-Journal, 8/26).

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What Your Peers Are Saying

Rating: | Wayne Fischer | August 31, 2011

...and it's about time. I spent 20+ years in three major industrial corporations, and when I got into healthcare I was amazed at the very high proportion of administrators. Way, way too many - and being paid handsomely. I counted eleven (11!) levels of management, from Team lead to President/CEO, at one well-known major healthcare organization.

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