Hospital layoffs amid rising healthcare employment: 4 thoughts

The healthcare industry added 25,000 jobs in October, according to the November jobs report from the U.S. Bureau of Labor Statistics. This follows a 12-month pattern of growth — healthcare steadily added an average of 21,000 jobs per month over the past year, according to the report.

The U.S. Bureau of Labor Statistics projected health care and social assistance sectors would add 5 million jobs between 2012 and 2022 to care for the aging population.

Yet hospitals around the country reported hundreds of layoffs in October and November, and employees may be asking, what gives?

Here are four thoughts on the seemingly contradictory trends:

 1. Budget cuts, reorganization and consolidation are causing duplicate or unnecessary positions to be cut at all levels. As health systems grow, departments that can be centralized or outsourced are targets for layoffs. For example, Eastern Maine Healthcare Systems, based in Brewer, cut 43 IT positions in October, following consolidations in their human resources and credentialing departments. Detroit Medical Center will lay off 565 employees beginning Dec. 1 as the system outsources housekeeping services. [Editor's note: A DMC spokesperson said Sodexo willingly agreed to offer employment to employees who successfully complete the on-boarding process.] Columbus (Ga.) Regional Health is eliminating 219 positions and laying off 99 employees, three of which are C-suite executives. Declining demand for inpatient care led Louisburg, N.C.-based Franklin Medical Center to lay off nearly a third of the hospital workforce. Hospitals and health systems are trying to cut costs by eliminating repetitive or unnecessary positions.

 2. Many times, nursing positions are unaffected by hospital layoffs.In most instances, bedside nurses retained their positions among widespread layoffs. For instance, Akron, Ohio-based Summa Health System laid off 140 employees, none of which included nurses who provide direct care. Hospitals often emphasize that nurses or clinicians directly involved in patient care are not affected by the workforce reduction. Due to the nursing shortage, many of the newly added jobs in healthcare are likely in patient care. The U.S Labor Bureau projections for the next decade point to a 28.1 percent expected increase in healthcare support occupations and a 21.5 percent expected increase in healthcare practitioners and technical occupations by 2022.

  3. Outpatient care is an area for growth. Outpatient service jobs are remaining stable or increasing at many hospitals. Ambulatory healthcare services grew by 19,000 jobs in October, according to the U.S. Bureau of Labor Statistics November jobs report. Due to the shift from inpatient to outpatient care, some hospital layoffs are really a reallocation of the current workforce. For instance, Franklin Medical Center, which laid off nearly a third of the hospital workforce, downsized the number of inpatient acute-care beds from 70 to two, but shared plans to maintain its emergency and outpatient care facilities. Asheville, N.C.-based Mission Health eliminated 130 jobs in September, but shared plans to add 147 jobs next year to handle outpatient growth.

  4. Some reported workforce reductions include the elimination of vacant positions. Related to the first point, some workforce reductions do not directly affect employees, as they are eliminating jobs that are vacant or current leaving positions empty. For instance, Yukon-Kushokwim Health in Bethel, Alaska, eliminated 160 jobs when it laid off 110 employees and left 50 positions empty in June. KentuckyOne Health in Louisville laid off 500 employees, and an additional 200 vacant positions were eliminated in February as part of the system's attempt to cut $218 million from its budget by the end of the fiscal year 2015.

 More articles on leadership and management:

Can your hospital survive as an independent hospital? 9 questions to ask

Hospital executive roundtable: Accomplishments, challenges of 2014

6 leadership priority shifts in 2015


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