Lee Health scales back hiring, raises as operating margin declines

Fort Myers, Fla.-based Lee Health has implemented restrictions on hiring and will likely reduce the rate of raises next year for most of its employees in response to declining earnings, according to the News-Press.

The hiring restrictions largely apply to administrative, nonmedical departments, a system spokesperson told the News-Press. Under Lee Health's preliminary spending plan for next year, salary raises for 2019 will average 2 percent for most of the system's employees, compared to the 3 percent they traditionally received.

The health system is making the changes in an attempt to improve its financial position. Lee Health CFO Ben Spence said the system's operating margin will likely decline to 2.9 percent by the end of the budget year, which concludes Sept. 30, compared to an operating margin of 4 percent a year earlier.

He said Lee Health is committed to improving its financial situation.

"Are we going to be OK? Yes, we are. But it's going to take some work. And we're committed to it, and we have a great team to do just that," he said, according to the report.

Stephen Brown, MD, chairman of Lee Health's governing board, said cutting expenses is not a good long-term strategy and the system needs to do more to generate the revenue needed to support its fast pace of growth.

"When I look at the expenses and what we're looking at going down the road and looking at the cutbacks and everything, I get nervous," he said at a recent board meeting, according to the report. "Have we bitten off more than we can chew?"

In recent years, Lee Health has spent more than $280 million on a new children's hospital and a new outpatient medical campus. The system has also undertaken a $347 million expansion of Gulf Coast Medical Center in Fort Myers, according to the report.

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