Hospital consolidation squeezing out executives

Hospital and health system consolidation often shrinks the C-suite and the ranks of middle management and clinical leadership, leading executives and physician leaders from each wonder, "Is my job safe?"

For example, after New York City-based Mount Sinai Hospital took over New York City-based Continuum Health Partners in 2013, many senior-level employees from both organizations were let go as part of the effort to consolidate operations and save money, according to Crain's New York Business. One former executive described the reorganizations as a "scorched earth" process, in which some of those laid off became consultants or resorted to moving out of state to find employment at other systems.

Healthcare administrators who are laid off as a result of downsizing may continue to face difficulties landing new jobs as systems continue to consolidate: Candidates who are passed over for a role at a particular hospital in a system can theoretically be ruled out for any other position within the system, according to the report.

Some job loss is to be expected following consolidation, as economies of scale drive mergers, with more job cuts taking place among administrators than clinical staff, according to Mark Murray, a senior consultant at Towers Watson.

"If the hospital is in a good shape, you're not talking about trying to take out the nursing contingent or specialties," Mr. Murray told Crain's. "It tends to be the higher-ups where the excess resides: senior executives, a whole host of middle managers, a whole variety of backroom operations."

While healthcare jobs are growing nationally, this growth is largely occurring in clinical activities and lower-paid positions. Hospital and health system executives are expected to hold just 0.7 percent of the sector's workforce through 2022, according to the Bureau of Labor Statistics. Management jobs represent 3.2 percent of healthcare jobs in the given time frame and are projected to remain stagnant.

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