Lahey Health is laying off about 75 employees to help bridge a budget gap after Lahey lost $37.3 million in the six-month period ending on March 31, The Boston Globe reported. Lahey said the layoffs aren’t related to a planned merger with Beth Israel Deaconess Medical Center.
The layoffs, which will happen later in the fall, represent less than 1% of Lahey's 14,500 employees. Most of the jobs are administrative and management roles that don’t affect patient care.
Lahey Chief Executive Dr. Howard Grant told employees in a memo that the layoffs are an attempt to “rebalance” the system and position Lahey to “grow in response to the changing needs of our community and the external healthcare environment.”
Lahey is far from the only system that’s shedding staff. Boston-based Brigham and Women’s Hospital offered buyouts to 1,600 workers this year, which the hospital warned could become layoffs if not enough people accept the buyouts. About 65% of the employees accepted the buyouts, a recent Stat News investigation reported.
Hospitals and systems like Lahey and Brigham and Women’s are facing the same issues as other hospitals — reduced insurer payments, fewer inpatient admissions and high labor costs. This is causing health systems to shed staff and seek mergers and acquisitions to find scale.
In Lahey's case, its proposed merger with Beth Israel Deaconess Memorial Center would also include three other Massachusetts hospitals: New England Baptist Hospital in Boston, Anna Jaques Hospital in Newburyport and Mount Auburn Hospital Cambridge. The merger would create a 13-hospital system, which would be the second largest in the commonwealth, behind only Partners HealthCare.
The merger still needs the OK from state regulators. Some are not supportive of the move, which they say will exacerbate the shrinking hospital market into fewer players. After the merger announcement, Dr. Stuart H. Altman, chairman of the Massachusetts Health Policy Commission, said in a prepared statement that he is concerned about market consolidation and the declining number of independent community hospitals. “It represents the most significant change in the structure of the Massachusetts healthcare market in more than 20 years,” he said.
Mirroring the consolidation trend across the country, Greater Boston has seen mergers and acquisitions as systems look to rein in costs.
Over the past few years, Lahey purchased Winchester Hospital and Beth Israel bought Jordan Hospital in Plymouth. The largest Massachusetts health system, Partners, has also been busy. Partners hopes to merge with nearby Massachusetts Eye and Ear. Partners also recently delayed its planned purchase of Care New England, which would have expanded its footprint to Rhode Island. Partners was concerned about whether Care New England could turn a profit; the two sides are expected to meet in the fall to discuss the matter further.