A Pennsylvania health system says it will lay off physicians, Cleveland Clinic offers 200 early retirement. Are physicians the next group of healthcare workers worrying about layoffs?
Earlier this week, Crozer-Keystone Health System in Springfield, Pa., announced it would lay off 250 positions, including some physicians.
The announcement garnered national attention within the industry because the layoffs may affect a group thought to be immune from such cuts: physicians. Until recently, few hospitals employed physicians, thus, laying them off would be impossible; as independent members of the medical staff, they weren't actually employed by the hospital. But as that is changing, could physicians be the next workers at risk of losing their jobs? In 2012, 29 percent of physicians either worked directly for a hospital or for a practice that was at least partially owned by a hospital, according to the American Medical Association.
That healthcare layoffs are on the rise can't be denied. In December 2013, the industry lost more jobs than it added, the first time that had happened in 10 years, according to data from the Bureau of Labor Statistics. Last year, stalwart healthcare institutions including the Cleveland Clinic and Vanderbilt announced layoffs. Should physicians be concerned? Are those who left private practice for hospital employment and stability at risk of being cut?
Probably not. The Cozer-Keystone announcement is a unique one, and compelled me to explore if other systems had resorted to physician layoffs as a way to reduce costs. The only other recent report of physician layoffs I could find was associated with a hospital closure — 32 medical residents lost their positions when St. Vincent's in Manhattan, the hospital they were training at, closed.
There has been some talk that physicians were among the some 3,000 Cleveland Clinic employees (the Clinic has long employed its physician workforce) offered early retirement last year as part of the health system's efforts to cut $330 million from its budget. In January, it was reported roughly 700 employees took the early retirement offer. A statement by the Clinic following the news said it would continue to evaluate the situation, but didn't specify how many, if any employees would receive layoff notices.
I contacted Cleveland Clinic earlier today to inquire about physicians being offered early retirement. A spokesperson for the health system informed me that indeed they had. "We had 26 professional staff members take the voluntary retirement. This is small percent of our entire professional staff of 3,000. It was offered to less than 200 based on their age and years of service."
The specifics of the packages offered weren't disclosed, so it's impossible to know just how attractive the deals were. The offering of the packages to physicians at all suggests that health systems' efforts to cut costs no longer ignore the costs of physician employment, or consider them an untouchable group.