Medford, Ore.-based Asante is planning job cuts as it reports mounting operating losses and warns of a potential $50 million budget shortfall by 2027.
In a May 4 memo to employees, CEO Tom Gessel cited rising labor and supply costs, a shift away from commercially insured patients and ongoing pressure from Medicare and Medicaid reimbursement as key drivers of the financial strain.
“Across healthcare, the headwinds we have discussed for many months — especially in Oregon — are no longer theoretical,” Mr. Gessel said, adding that the challenges are creating strain across the organization and the broader industry.
Asante reported a $16 million operating loss for the first half of its fiscal year, including a loss of more than $12 million in March alone — its first sustained period of losses since 2023.
Mr. Gessel said that without intervention, the system could face a $50 million budget shortfall by 2027.
He attributed the decline in part to a payer mix shift, with more than 75% of patients covered by Medicare, Medicaid and other government programs — which reimburse below the cost of care — and commercial coverage falling to about 14%.
The system is also seeing losses tied to its Ashland, Ore., campus, where inpatient and obstetric services are set to be consolidated to Asante Rogue Regional Medical Center in Medford as the facility transitions to an outpatient model.
Asante’s response includes cost-cutting initiatives, operational reviews and advocacy efforts at the state and federal levels, according to the memo.
Workforce reductions are a central component of the plan. The system expects to eliminate 300 or more roles in the coming months — about 5% to 6% of its workforce — primarily in nonclinical areas, though some clinical positions may also be affected.
The Oregon Nurses Association criticized the planned cuts in a May 4 statement, arguing the reductions stem from leadership decisions and warning that additional workforce reductions could worsen care access and staffing challenges across Southern Oregon.
Asante previously cut about 400 roles in 2024 and has continued to reduce corporate and leadership positions, according to system materials.
The system is also pausing most nonclinical hiring while continuing to recruit for patient-facing roles.
Asante said it must identify at least $50 million in savings to break even by 2027.
Editor’s note: This story was updated May 6.
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