- Providence Health & Services, a nonprofit health system with properties in seven states and 111,000 employees, has eliminated 210 positions, The Oregonian reported.
- The move is in hopes to rein in its financial standing. The system posted a $255 million operating loss in 2016 while pulling in $22 billion in revenue.
- "There has been a fundamental shift in our industry in that we are providing more care to more patients, but are receiving the same amount of revenue and often less to cover the costs," Providence spokesperson Colleen Waddell wrote to The Oregonian. "We have worked to significantly reduce operational costs, such as vendor and supply contracts, non-critical capital projects and not filling non-critical administrative positions. Unfortunately, we have made the difficult decision to reduce some filled positions."
Though the layoffs are a small number in comparison to the system's total workforce, the trimming is yet another example showcasing how certain health systems are struggling to make their budgets work.
In the past few months, hospitals of all sizes, and in all parts of the country, have said they are cutting jobs or eliminating open positions. Major providers affected have included Memorial Hermann, Brigham and Women’s Hospital, NYC Health + Hospitals, Summa Health and Hallmark Health.
Many providers are citing softening reimbursements and admissions as reasons behind the decisions. As Providence's spokesperson notes, there are other cost containment options but sometimes health systems have to make the tough choice to eliminate certain positions.
Some areas affected in the Providence cuts were marketing and mental health call center positions.
Since the Affordable Care Act was implemented, hospitals enjoyed mitigating levels of uncompensated care and more patients. However, some admissions have been dropping and many new patients were sicker than expected, contributing to higher care costs. In addition, hospital jobs have continued to increase, contributing to higher expenses.
Providence's experience speaks to an issue other health systems are struggling with, and the current trends underlying the cuts don't look to be changing any time soon. Providers will likely have to take a hard look at their budgets going into a new budgetary year.