Is Healthcare Facing More Layoffs in Midst of Being Short Staffed?

Sarasota, FL (WorkersCompensation.com) – According to data from the Cecil G. Sheps Center for Health Services Research, the number of rural hospital closures has dropped off significantly, with only 3 closures so far this year, compared to 19 closures in 2020, 18 in 2019, and 17 in 2015. While the number of rural closures may be fewer, the number of hospital layoffs across the nation indicate facilities are struggling to find a balance.

During the pandemic, around 12 percent of healthcare job vacancies were due to layoffs and around 18 percent were due to employees quitting. Reports from earlier this year estimated that labor expenses increased 37 percent over what they were prior to the pandemic, with a large portion of those increases coming from contract labor in the form of travel nurses that make around double that of regularly employed nursing staff. According to a recent report from The Gazette, Centura Health will begin laying off 1 percent of it’s 21,000 employee workforce in Colorado and Kansas. Layoffs at their Penrose-St. Francis Health Services locations will continue through October 7th. In a statement issued to The Durango Herald, Centura Health stated they had initially cut costs back in March, but was still missing year-to-date budget by $37 million.

Interestingly enough, according to the Gazette report while they are laying off staff and offering job-transitioning support, they are still recruiting and hiring clinical staff. Additionally, the company is building a new orthopedic hospital to the tune of $180 million as part of a $2 billion expansion to fund hospitals in the area.

In Michigan, the Beaumont Spectrum Health System announced its plan to lay off 400 employees, according to a report from The Detroit News. The layoff comes on the heels of a merger of Spectrum Health with Beaumont Health back in February of this year. In August, the group reported that their operating margin was 1.8 percent lower than expected. In a statement from Chief Financial Officer Matthew Cox, in the first 6 months of the year the organization had seen a deterioration in costs as a “result of lower volumes and higher agency and critical staffing costs in our care delivery divisions." In a report from Times Union, Albany Medical Center also announced the elimination of 37 jobs due to an unprecedented $66 million year to date operating loss. According to the report, in the midst of staff shortages and increased wait times, the facility had resorted to attendance rewards, increased salaries, and referral bonuses in an effort to retain their workforce.

In the face of high burnout rates, staffing shortages, and increased operating expenses and regulations, it will be interesting to see how healthcare organizations adjust, and if they can find a new way to stay afloat in the many challenges ahead.

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