Job cuts reach the C-suite

Hospital C-suites face tough decisions as the cost of doing business exceeds revenue and reimbursement, more care transitions outside of the hospital setting, and high labor and supply costs continue. These decisions range from service cuts to streamlining leadership structures.

Becker's has reported on at least 17 health systems that have announced changes to executive ranks and administration teams in 2023. One change facing C-suites is the elimination of the COO role. On July 27, two health systems reported they were nixing the position. 

Lewes, Del.-based Beebe Healthcare eliminated the position of executive vice president and COO Rick Schaffner, RN, who had served in the role since 2015. David Tam, MD, the health system's president and CEO, said the decision is "an effort to recalibrate the team of executives leading our growing and evolving healthcare system." He said Mr. Schaffner's duties will be reassigned to others. 

That same say, Indianapolis-based Indiana University Health divided the responsibilities of its COO role and named four senior leaders to new positions. Two senior vice presidents — one of system healthcare operations, one of system regional operations — will share the former responsibilities of Michelle Janney, PhD, RN, who is retiring.

Some health systems are also reorganizing regions, which includes adjusting leadership responsibilities. For instance, Philadelphia-based Jefferson Health is consolidating from five divisions to three to flatten management and become more efficient, and Roseville, Calif.-based Adventist Health is transitioning from seven care networks to five. 

Jefferson noted the change would result in executive layoffs.

"That integration is not just about cost cutting," Jefferson CEO Joseph Cacchione, MD,  told Becker's in January. "In fact, it's less about cost cutting, and more about the efficiency of integration so that we can optimize care delivery. So, for example, are we duplicating procedures that we do, where hospitals that are just five miles apart are competing with one another for the same patients? That's just duplicative, and it's not an efficient use of our resources."

Other hospitals have cut executive roles as well, including Habersham Medical Center in Demorest, Ga., which laid off four executives. The layoffs were part of cost-cutting measures before the hospital joined Gainesville-based Northeast Georgia Health System.

Healthcare is not alone. Across U.S. industries, companies are experiencing C-suite trends and changes. One recent analysis found that CFOs face the worst job security in the C-suite. The analysis by DataRails found that CFOs at the biggest U.S. listed companies lasted an average of 3.51 years in post between 2016 and 2021, the latest period for which official data is available.

Additionally, the role of the chief diversity officer is being vacated in droves — after the position rapidly gained prevalence in 2020, The Wall Street Journal reported July 21. Diversity, equity and inclusion executives at Disney, Netflix and Warner Bros. Discovery are among those who have been laid off. 

Read more about C-suite trends here.

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