Obama And Trump’s First 100 Days Of Healthcare Policy: A Comparison

https://www.forbes.com/sites/robertpearl/2025/04/27/obama-and-trumps-first-100-days-of-healthcare-policy-a-comparison/

In chaos theory, there’s a concept known as the butterfly effect—the idea that a seemingly small action, occurring at just the right moment, can trigger ripple effects that grow across time and space. A butterfly flaps its wings in Brazil, the saying goes, and a tornado forms weeks later in Texas.

Presidential decisions can carry the same weight, especially those made in the first 100 days of a new administration. Time and again, these early choices unleash far-reaching consequences that reshape a nation.

As Donald Trump wraps up the opening stretch of his second term, his healthcare-focused executive actions underscore the consequentiality of this early window. And when compared with Barack Obama’s approach in 2009 (the last time a president pursued major healthcare reforms right out of the gate), the contrast becomes even more striking.

Two presidents. Two defining moments. And one fundamental question that both men had to answer in the first 100 days: Where should healthcare reform begin — by expanding coverage, improving quality or cutting costs?

Crisis, Control And A Key Healthcare Choice

The idea that a president’s first 100 days matter dates back to Franklin D. Roosevelt. In 1933, during the depths of the Great Depression, FDR passed a wave of New Deal reforms that redefined the role of government in American life.

Ever since, the opening months of a new presidency have served as both proving ground and preview. They reveal how a president intends to govern and what he values most.

For both presidents Obama and Trump, their answer to the healthcare question — where to begin? — would shape what followed. Obama chose to expand coverage. Trump has chosen to cut costs. Those decisions set them on opposing paths. And with every subsequent policy decision, the gap between their contrasting approaches only grows.

’09 Obama: Health Coverage And Congressional Action

In the quiet calculus of early governance, President Obama concluded that without health insurance coverage, access to high-quality medical care would remain out of reach for tens of millions of Americans.

Confronting a system that left 60 million uninsured, he believed that expanding access to coverage was a vital first step — not only to improve individual health outcomes, but to create a healthier nation that ultimately would require less medical care (and spending) overall.

That belief was grounded in lived experience: his mother’s battle with cancer and the insurance disputes that followed, as well as his years as a community organizer working with families who couldn’t afford medical care.

He also understood that only Congressional legislation — rather than executive action — would make those gains durable. So, in his first 100 days, he pursued a strategy grounded in consensus-building. He convened healthcare stakeholders, hosted public healthcare summits, expanded the Children’s Health Insurance Program (CHIP) and proposed a federal budget that included a $634 billion “down payment” on healthcare reform.

’25 Trump: Cost Cutting And Executive Control

Donald Trump didn’t ease into his second term. He charged in, pen in hand. His priorities for the country were clear: cut taxes, impose tariffs and reduce federal spending.

For Trump, speed was of the essence. So, he bypassed Congress in favor of executive orders, downsizing healthcare agencies and dismantling regulatory oversight wherever possible.

At the center of Trump’s domestic agenda is an ambitious income tax overhaul, dubbed the “big beautiful bill.” But passing it will require support from fiscal conservatives in his own party. To offset the steep drop in tax revenue, Trump has signaled a willingness to slash federal spending, starting with healthcare programs.

What Comes Next: Mapping Health Policy Consequences

Presidents make thousands of decisions over the course of a four-year term, but those made in the first few months typically matter most. Both Obama and Trump had to decide whether to prioritize expanding coverage or cutting costs, and that choice would shape the steps that follow.

For Obama, the consequences of his choice were sweeping. His early focus on increasing health insurance coverage laid the foundation for the Affordable Care Act, the most ambitious healthcare reform since Medicare and Medicaid in the 1960s. The ACA provided affordable insurance to more than 30 million Americans, offered subsidies to low- and middle-income families, cut the uninsured rate in half and guaranteed protections for those with preexisting conditions. The law survived political opposition, legal challenges and subsequent presidencies.

However, those gains came at a price. Annual U.S. healthcare spending more than doubled — from $2.6 trillion in 2010 to over $5.2 trillion today — without significant improvements in life expectancy or care quality.

Trump’s early decisions are reshaping healthcare, too, but in ways that reflect a very different set of priorities and a sharply contrasting vision for the federal government’s role.

1. Cost-Driven Actions: Reducing Government Healthcare Spending

Guided by a business-oriented focus on cost containment, Trump has sought to reduce the federal government’s role in healthcare through sweeping budget and staffing changes. Among the most significant:

  • Agency layoffs: The Department of Health and Human Services has initiated mass layoffs across the CDC, NIH and FDA, reducing staff capacity by 20,000 and cutting critical programs, including HIV research grants and initiatives targeting autism, chronic disease, teen pregnancy and substance abuse.
  • ACA support rollbacks: The administration slashed funding for ACA navigators and rescinded extended enrollment periods, making it more difficult for individuals (especially low-income Americans) to obtain coverage.
  • Planned Parenthood and family planning cuts: Freezing Title X funds has reduced access to reproductive healthcare in multiple states.
  • Medicaid at risk: A proposed $880 billion reduction over 10 years could eliminate expanded Medicaid coverage in many states. Additional moves (like work requirements or application hurdles) would likely reduce enrollment further.

2. Cultural And Executive Power Moves: Redefining Government’s Role In Health

While cutting costs has been the central goal, many of Trump’s actions reflect a broader ideological stance. He’s using executive authority to reshape the values, norms and institutions that have defined American healthcare. These include:

  • Withdrawal from the World Health Organization (WHO): The administration formally ended U.S. participation, citing concerns about funding and governance.
  • Restructuring USAID’s health portfolio: Multiple contracts and programs related to maternal health, infectious disease prevention and international public health have been ended or scaled back.
  • Policy changes on federal language and research topics: Executive directives have modified how agencies are allowed to address topics related to gender and sexuality, leading to the removal of LGBTQ+ content from health resources and websites.
  • Reorganization of DEI programs: Diversity, equity and inclusion initiatives have been rolled back or eliminated across several federal departments.

The Likely Consequences Of Trump’s First 100 Days

President Trump’s early actions reveal two defining trends: cutting government healthcare spending and reshaping federal priorities through executive authority. Both are already changing how care is accessed, funded and delivered. And both are likely to produce lasting consequences.

The most immediate impact will come from efforts to reduce healthcare spending. Cuts to Medicaid, ACA enrollment support and family planning programs are expected to lower insurance enrollment, particularly among low-income families, young adults and people with chronic illness.

As coverage declines, care becomes harder to access and more expensive when it’s needed. The results: delayed diagnoses, avoidable complications and rising levels of uncompensated care.

His second set of actions — including reduced investment in federal science agencies — will slow drug development and weaken the infrastructure needed to respond to future public health threats.

Meanwhile, a more constrained and domestically focused healthcare agenda is likely to diminish trust in federal health agencies, limit access to culturally competent care and produce a loss of global leadership in health innovation.

The U.S. Constitution gives presidents broad power to chart the nation’s course. And the decisions made in their first 100 days shape the trajectory of an entire presidency.

One president decided to prioritize coverage, while a second chose cost-cutting. And like the flap of a butterfly’s wings, these early actions generate ripples — expanding in size over time and radically altering American healthcare, for better or worse.

The Perfect Storm facing the Healthcare Workforce: Eight Current Issues frame the Challenge

Tonight at midnight, thousands of federal workers face the possibility their jobs will be eliminated as part of the Department of Government Efficiency (DOGE) federal cost reduction initiative under Elon Musk’ leadership. Already, thousands who serve in federal healthcare roles at the NIH, CDC and USAID have been terminated and personnel in agencies including CMS, HHS and the FDA are likely to follow.

The federal healthcare workforce is large exceeding more than 2.5 million who serve agencies and programs as providers, clerks, administrators, scientists, analysts, counselors and more. More than half work on an hourly basis, and 95% work outside DC in field offices and clinics. For the vast majority, their work goes unnoticed except when “government waste” efforts like DOGE spring up. In those times, they’re relegated to “expendables” status and their numbers are cut.

The same can be said for the larger private U.S. healthcare workforce. Per the U.S. Bureau of Labor Statistics, industry employment was 21.4 million, or 12.8% of total U.S. employment in 2023 and is expected to reach 24 million by 2030. It’s the largest private employer in the U.S. economy and includes many roles considered “expendable” in their organizations.

Facts about the U.S. healthcare workforce:

  • More than 70% of the healthcare workforce work in provider settings including 7.4 million who work in hospitals.
  • More than half work in non-clinical roles.
  • Home health aides is the highest growth cohort and hospitals employ the biggest number (7.4 million).
  • 29% of physicians and 15% of nurses are foreign born, almost three-fourths of the workforce are women, two-thirds are non-Hispanic whites, and the majority are older than 50.
  • Its licensed professions enjoy public trust ranking among Gallup’s highest rated though all have declined:
 % 2023‘19-‘23’23 Rank % 2023‘19-‘23’23 Rank
Nurses78-71Pharmacists55-96
Dentists59-2 Psychiatrists36-79
Medical doctors56-95Chiropractors33-810

The Perfect storm

The healthcare workforce is unsteady: while stress and burnout are associated with doctors and nurses primarily, they cut across every workgroup and setting.

Eight fairly recent issues complicate efforts to achieve healthcare workforce stability:

Increased costs of living: 

Consumers are worried about their costs of living: it hits home hardest among young, low-income households including dual eligible seniors for whom gas, food and transportation are increasing faster than their incomes, and rents exceed 50% of their income. The healthcare workforce takes a direct hit: one in five we employ cannot pay their own medical bills.

Slowdown in consolidation: 

The Federal Trade Commission’s new pre-merger notification mandate that went in effect today essentially requires greater pre-merger/acquisition disclosures and a likely slowdown in deals.  Organizations anticipating deals might default to layoffs to strengthen margins while the regulatory consolidation dust settles. Expendables will take a hit.

Uncertainty about Medicaid cuts: 

In the House’ budget reconciliation plan, Medicaid cuts of up to $880 billion/10 years are contemplated. A cut of that magnitude will accelerate closure of more than 400 rural hospitals already at risk and throw the entire Medicaid program into chaos for the 79 million it serves—among them 3 million low-hourly wage earners in the healthcare workforce and at least 2 million in-home unpaid caregivers who can’t afford paid assistance. The impact of Medicaid cuts on the healthcare workforce is potentially catastrophic for their jobs and their health.

Heightened attention to tax exemptions for not-for-profit hospitals: 

Large employers sent this recommendation to Congressional leaders last week as spending cuts were being considered: “Nonprofit hospitals, despite their tax-exempt status, frequently prioritize profits over patient care. Many have deeply questionable arrangements with for-profit entities such as management companies or collections agencies, while others have “joint ventures” with Wall Street hedge funds or other for-profit provider or staffing companies. Nonprofit hospitals often shift the burden of their costs onto taxpayers and the communities they serve by overcharging for health care services, or abusing programs intended to provide access to low-cost care and prescription drugs for low-income patients. By eliminating nonprofit hospital status, resources could be more evenly distributed across the healthcare system, ensuring that hospitals are held accountable for their charitable care both to their communities and the tax laws that govern them.” Pressures on NFP hospitals to lower costs and operate more transparently are gaining momentum in state legislatures and non-healthcare corporate boardrooms. Belt tightening is likely. Layoffs are underway.

Heightened attention to executive compensation in healthcare organizations: 

Executive compensation, especially packages for CEO’s, is a growing focus of shareholder dissent, Congressional investigation, media coverage and employee disgruntlement. Compensation committee deliberations and fair market comparison data will be more publicly accessible to communities, rank and file employees, media, regulators and payers intensifying disparities between “labor” and “management”.

Increased tension between providers and insurers:

Health insurers are now recovering from 2 years of higher utilization and lower profits; hospitals did the same in 2022 and 2023. Neither is out of the woods and both are migrating to tribal warfare based on ownership (not-for-profit vs. investor owned vs. government owned), scale and ambition. Bigger, better-capitalized organizations in their ranks are faring better while many struggle. The workforce is caught in the crossfire.

Increased pressure on private equity-backed employers to exit: 

The private equity market for healthcare services has experienced a slow recovery after 2 disappointing years peppered by follow-on offerings in down rounds. Exit strategies are front and center to PE sponsors; workforce stability and retention is a means to an end to consummate the deal—that’s it.

The AI Yellow Brick Road: 

Last and potentially the most disruptive is the role artificial intelligence will play in redefining healthcare tasks and reorganizing the system’s processes based on large-language models and massive investments in technology. Job insecurity across the entire healthcare workforce is more dependent on geeks and less on licensed pro’s going forward.

These eight combine to make life miserable most days in health human resource management. DOGE will complicate matters more. It’s a concern in every sector of healthcare, and particularly serious in hospitals, medical practices, long-term and home care settings.

‘Modernizing the healthcare workforce’ sounds appealing, but for now, navigating these issues requires full attention. They require Board understanding and creative problem-solving by managers. And they merit a dignified and respectful approach to interactions with workers displaced by these circumstances: they’re not expendables, they’re individuals like you and me.

36 hospitals, health systems cutting jobs

A number of hospitals and health systems are reducing their workforces or jobs due to financial and operational challenges. 

Below are workforce reduction efforts or job eliminations announced this year. 

June

West Monroe, La.-based Glenwood Regional Medical Center, part of Dallas-based Steward Health Care, laid off 23 employees. Affected roles included leadership, a spokesperson for the hospital said in a statement shared with Becker’s

Cleveland-based University Hospitals is reducing its leadership structure by more than 10% as part of more than 300 layoffs. COO Paul Hinchey, MD, told Becker’s C-suite level leaders and vice presidents were included in the cuts. 

Portland-based Oregon Health & Science University told staff June 6 that it plans to lay off at least 500 employees, citing financial issues. The news follows the institution and Portland-based Legacy Health signing a binding, definitive agreement to come together as one health system under OHSU Health. 

May

The All of Us Research Program, a collaboration of the University of Arizona in Tucson and Phoenix-based Banner Health, plans to lay off 45 workers due to reduced federal research funding, according to an Arizona WARN notice filed May 28. The program, launched in 2018, is part of HHS’ National Institutes of Health.

Burlington, Mass.-based Tufts Medicine will lay off 174 employees due to industry challenges, the health system confirmed in a May 21 statement shared with Becker’s. The layoffs, which have varying effective dates, will primarily affect administrative and non-direct patient care roles. Some leadership roles were affected, a spokesperson told Becker’s

Doral, Fla.-based Sanitas Medical Center laid off 56 employees between May 17 and May 20. Some of the affected roles included nine care coordinators, one care educator, and two case managers, according to a May 20 WARN notice accessed by Becker’s.

Select Specialty Hospital in Longview, Texas, will close on or about June 30, affecting 94 employees, Becker’s has confirmed. The hospital, operated by Mechanicsburg, Pa.-based Select Medical, is a 32-bed, critical illness recovery facility.

White Rock Medical Center in Dallas laid off nearly 35% of its staff. The hospital temporarily stopped taking patients transported by emergency medical services due to the layoffs, The Dallas Morning News reported. It has since resumed accepting those patients.

Oakland-based Kaiser Foundation Hospitals is laying off 76 workers in California. The layoffs primarily affect employees in IT and marketing, according to regulatory documents filed with the state May 1.

April

Pittsburgh-based UPMC will lay off approximately 1,000 employees. The layoffs, which represent more than 1% of the health system’s 100,000 workforce will primarily affect nonclinical, administrative and non-member-facing employees. 

Union Springs, Ala.-based Bullock County Hospital laid off 95 employees beginning April 9, according to regulatory documents filed with the state. The layoffs occurred as Bullock seeks to become a rural emergency hospital and is ending psychiatric services as part of the shift, AL.com reported April 25.

Jackson Health System reduced compensation programs for senior leaders; laid off fewer than 25 people, including one hospital CEO; and froze many vacant positions, especially in support and nonclinical areas, a spokesperson for the Miami-based organization confirmed to Becker’s. President and CEO Carlos Migoya shared these efforts in a message to staff, citing financial challenges.

Coos Bay, Ore.-based Bay Area Hospital plans to conduct layoffs as it outsources its revenue cycle management operations, a spokesperson for the hospital confirmed to Becker’s. The transition will affect 27 positions.

Manchester, N.H.-based Catholic Medical Center plans to cut 142 positions, including 54 layoffs. An April 18 letter to employees from CMC president and CEO Alex Walker, obtained by Becker’s, said cuts would occur through the 54 staff eliminations, open position cuts, reduced hours, planned departures, and resource redeployment in satellite locations for CMC.

Marshfield (Wis.) Clinic Health System will lay off furloughed staff, effective in early May. The health system furloughed about 3% of its workforce in January, affecting positions mostly in non-patient-seeing departments, including leadership roles. 

Norwalk, Ohio-based Fisher-Titus Medical Center laid off some workers in nonclinical roles and reduced hours for others. Seven employees, about 0.5% of the health system’s workforce, were laid off  April 1. Work hours were reduced for another 10 positions, a hospital spokesperson told Becker’s.

March

Robbinsdale, Minn.-based North Memorial Health is laying off 103 employees in clinical and nonclinical roles, citing financial challenges. The layoffs affect several services across the two-hospital system. 

AHMC’s San Gabriel (Calif.) Valley Medical Center is laying off 62 workers, according to regulatory documents filed with the state March 13. The layoffs take effect May 13.

Miami-based North Shore Medical Center, part of Steward Health Care, started conducting layoffs as part of cuts to some of its programs amid the Dallas-based health system’s continued financial struggles. Around 152 workers represented by 1199SEIU were laid off, a union spokesperson confirmed. However that number could be higher as their members do not represent every employee at NSMC, the spokesperson said.

Oakland, Calif.-based Kaiser Foundation Hospitals is laying off more than 70 employees. The layoffs primarily affect those in IT roles.

February

Lion Star, the group that operates Nacogdoches (Texas) Memorial Hospital, is closing four of its clinics on March 22, which will result in fewer than 50 layoffs, a Lion Star spokesperson confirmed to Becker’s. No additional layoffs are planned.

Little Rock-based Arkansas Heart Hospital has laid off fewer than 50 employees since the beginning of 2024, citing low reimbursement rates. The layoffs affected lower-paying positions, Bruce Murphy, MD, CEO of the hospital, said, according to Arkansas Business.

Cincinnati-based Mercy Health will lay off some call center positions. The system attributed the move to its partnership with a third party to operate its enterprise contact center for primary care scheduling.

Ridgecrest (Calif.) Regional Hospital announced more layoffs to avoid closure. It is laying off 31 more employees, including seven licensed vocational nurses and four registered nurses, two months after it announced plans to lay off nearly 30 others and suspend its labor and delivery unit, Bakersfield.com reported Feb. 15.

Medford, Ore.-based Asante health system laid off about 3% of its workforce. The layoffs primarily affected administrative and support roles and were necessary to offset “financial headwinds” over the past several years, according to a report from NBC affiliate KOBI-TV, which is based on an internal memo sent to staff Feb. 9. 

Oakdale, Calif.-based Oak Valley Hospital District is scaling back services and laying off workers to improve its finances. The hospital said in a Feb. 2 statement shared with Becker’s that it will close its five-bed intensive care unit, discontinue its family support network department and lay off 28 employees, including those in senior management and supervisor positions. 

Chicago-based Rush University System for Health laid off an undisclosed number of workers in administrative and leadership positions, citing “financial headwinds affecting healthcare providers nationwide.” No additional information was provided about the layoffs, including the number of affected employees.

University of Chicago Medical Center laid off about 180 employees, or less than 2% of its roughly 13,000-person workforce. The majority of affected positions are not direct patient facing, the organization said in a statement shared with Becker’s.

Fountain Valley, Calif.-based MemorialCare laid off 72 workers due to restructuring efforts at its Long Beach (Calif.) Medical Center and Long Beach, Calif.-based Miller Children’s and Women’s Hospital. The layoffs include 13 positions at Long Beach Medical Center’s outpatient retail pharmacy, which is closing Feb. 2, a spokesperson for MemorialCare said in a statement shared with Becker’s.

January

George Washington University Hospital in Washington, D.C., part of King of Prussia, Pa.-based Universal Health Services, is laying off “less than 3%” of its employees. The move is attributed to restructuring efforts.

Amarillo-based Northwest Texas Healthcare System, also part of Universal Health Services, announced plans to lay off a “limited number of positions.” The move is attributed to restructuring efforts. 

Lehigh Valley Health Network is cutting its chiropractic services and laying off 10 chiropractors. The layoffs are effective April 12 and due to restructuring. The Allentown, Pa.-based health system has 10 chiropractic locations, according to its website

Central Maine Healthcare is laying off 45 employees as part of management reorganization. The Lewiston-based system, which also ended urgent care services at its Maine Urgent Care on Sabattus Street in Lewiston on Jan. 12, has 3,100 employees total.

University of Vermont Health Network, based in Burlington, is cutting 130 open positions. The move is part of the health system’s efforts to reduce expenses by $20 million.

Med-Trans, a medical transport provider based in Lewisville, Texas, closed its UF Health ShandsCair base serving Gainesville, Fla.-based UF Health Shands Hospital on Jan. 10 due to decreased transportation demands. The move also resulted in layoffs, a spokesperson for UF Health, the hospital’s parent company, told Becker’s in a statement. 

RWJBarnabas Health, based in West Orange, N.J., is laying off 79 employees, according to documents filed with the state on Jan. 8. The layoffs are effective March 31 and April 5. A spokesperson for the health system told Becker’s that 74 of the positions were “time-limited information technology training job functions.” The other layoffs were due to closure of an urgent care center.

University Hospitals to cut 300+ jobs, including some VP, C-suite roles

Citing financial challenges, Cleveland-based University Hospitals is reducing its leadership structure by more than 10% as part of more than 300 layoffs.

Rising costs of supplies, labor and purchase services, and reduced Medicare reimbursement rates, have affected UH and various other systems, according to COO Paul Hinchey, MD. 

“All of that’s creating significant downward pressure on our revenue,” Dr. Hinchey told Becker’s

The news from UH follows a national trend of hospitals facing significant headwinds. Kaufman Hall found in early June that 40% of hospitals in the U.S. are still losing money

At UH, revenue has increased nearly 9% year over year due to various changes, such as increased access for patients and implementing a new EHR system, according to UH. 

“[However], in spite of our efforts and being successful in growth, that downward pressure on revenue and the increasing prices is pinching our margin,” said Dr. Hinchey.

Dr. Hinchey said the health system has been optimizing operations since the end of the pandemic. 

“We took a look at our cost structure and recognized we needed to get our cost structure down,” he said. “We’ve done a couple initiatives that we put under the auspices of a Medicare break-even initiative to try to drive down our cost structure.”

Some actions already taken have included increasing efficiency, consolidating service lines and closing hospitals in Bedford and Richmond Heights, according to UH.

Most recently, the health system identified an opportunity to make cuts to leadership. Dr. Hinchey said C-suite level leaders and vice presidents were included in the cuts. 

“These decisions are never easy,” Cliff Megerian, MD, CEO and Jane and Henry Meyer Chief Executive Officer Distinguished Chair, said in a news release. “The important thing is that we make these strategic moves now so we can continue to serve our community and fulfill our mission for decades to come. We are thankful for our hometown team that delivers lifesaving care to our neighbors, friends and relatives each and every day.”

Dr. Hinchey said UH began notifying employees of the layoffs on June 17. Affected workers will receive a severance package aligned with their roles and tenure.

OHSU to lay off at least 500 employees

Portland-based Oregon Health & Science University told staff June 6 that it plans to lay off at least 500 employees, citing financial issues. 

“Our expenses, including supplies and labor costs, continue to outpace increases in revenue,” top leaders told staff in a message shared with Becker’s. “Despite our efforts to increase our revenue, our financial position requires difficult choices about internal structures, workforce and programs to ensure that we achieve our state-mandated missions and thrive over the long term.”

Willamette Week was first to report the news, which follows Oregon Health & Science University and Portland-based Legacy Health signing a binding, definitive agreement to come together as one health system under OHSU Health. OHSU Health would comprise 12 hospitals and, more than 32,000 employees and will be one of the largest providers of services to Medicaid members in Oregon. 

An Oregon Health & Science University spokesperson told Becker’s more information about the layoffs will be provided in the coming weeks.

In the June 6 message, leaders told staff that “while we work to address short-term financial challenges, we must also plan for an impactful and successful future. We understand that last week’s announcement regarding the Legacy Health definitive agreement, while exciting and potentially transformational, raises questions about how we can afford the required investment in light of our financial situation.”

They added that a capital investment in Legacy “represents a strategic expansion designed to enhance our capacity,” and will be funded by borrowing with 30-year bonds.  

“These capital dollars cannot be used to close gaps in our fiscal year 2025 OHSU budget or to pay our members. The OHSU Strategic Alignment and budgetary work would be necessary with or without the Legacy Health integration,” leaders said.

OHSU has planned a town hall next week to further discuss the combination with Legacy. 

Leaders said discussions between managers and members about workforce reductions will begin after the annual review and contract renewal process, with additional reductions occurring over the next few months.

Return-to-Office Mandates: Layoffs in Sheep’s Clothing

https://www.reworked.co/employee-experience/return-to-office-mandates-layoffs-in-sheeps-clothing/

Companies demand employees come into the office for many legitimate reasons. But in some cases, it appears to be a tactic to force employees out.

Companies, large and small, are asking employees to return to the office at least a few days a week. But in some cases, these return-to-office (RTO) policies appear to be a passive-aggressive approach to eliminate roles, rather than doing layoffs.

Case in point: AT&T recently said it would require thousands of managers from across the country to work in person at just nine locations. One manager referred to the move as “a layoff wolf in return-to-office sheep’s clothing.”  

Dell stated employees who chose to work fully remotely won’t be eligible for promotion. Google plans to factor an employee’s in-person attendance into their performance evaluation

While there are several reasons companies could be using RTO to avoid actively laying people off, Maurice Cayer, lecturer and coordinator of the master of science human resources program at the University of New Haven, said it could backfire.

“It’s a blunt instrument,” he said of the tactic. 

A Disconnect Between Employers and Employees 

Research from the University of Pittsburgh found companies use RTO mandates at times for “power grabbing and blaming employees for poor performance,” yet the results harm employee satisfaction and fail to improve performance. 

Still, 90% of organizations plan to implement RTO policies this year, and 80% will track in-office attendance, such as via badge swipes and desk sensors. 

Most employees prefer remote or hybrid work. Nearly 50% said they would quit their jobs if their employer mandated a full-time RTO policy, according to the Integrated Benefits Institute.  

Employees’ feelings about in-office work are clear. So why are companies choosing to enforce such an unpopular — and ineffective — tactic? 

One reason is that some organizations, especially tech companies, overstaffed as they rebounded from the pandemic and now have too many employees, Cayer said. The introduction of new technology, like artificial intelligence, also might be behind a reduction in staff. 

Others may be using RTO as a test. The mandate in those cases screens employees to determine “who’s the most committed to the organization” and open to a more traditional work model, said Colleen Flaherty Manchester, a professor in the Work and Organizations department at the University of Minnesota. 

The tactic highlights the disconnect between employers’ perceptions of flexible work and employees’ desires to work remotely for personal or productivity reasons, she said. 

Requiring employees to return to work in person may have some advantages, such as improved communication and more opportunities for mentorship, but organizations typically haven’t experienced extensive productivity issues with remote work, said Carrie Urrutia, a labor and employment attorney at Eastman & Smith in Toledo, Ohio. 

“Many companies simply want things to revert to the way they were before COVID,” she said. 

The Consequences of Using RTO to Trim Staff 

Companies risk losing their best people with RTO policies, said Cayer. 

“Organizations are placing bets, and they’re willing to live with the consequences of losing some highly desirable people in the process,” he explained. “But, maybe they’ll make up for it by having people who are engaged at work.” 

Quietly laying off workers under the RTO guise could anger employees and damage an organization’s reputation, which might impact future hiring and meeting business goals, Urrutia added. 

Yet the approach is attractive to companies. “It could be a less-costly way to achieve a goal of reducing the workforce without a formal reduction in force,” said Urrutia.

Employees who quit as a result of RTO mandates wouldn’t be eligible for unemployment compensation and typically wouldn’t receive a severance package as opposed to those who were laid off, she explained. “Generally speaking, employees who voluntarily resign are not entitled to those benefits.”

However companies would be better served implementing hiring freezes or enabling more flexibility, she argued. Urrutia said organizations should examine their current remote or hybird work arrangements and assess what’s working for them and employees. If RTO is mandated, they should clearly articulate the business reasons why it’s necessary and why remote work isn’t working. 

“Aim to find a sweet spot that achieves the manager’s goals of in-person connection for innovation and group productivity, yet also meets some of the needs of employees,” Manchester said. 

Are Quiet Layoffs Legal? 

As a rule, employees don’t have a legal right to work from home, so employers are free to require in-person work as a condition of employment, Urrutia said. Workers therefore typically don’t have legal recourse if they feel a RTO mandate is designed to make them quit.

One exception is if an employee had a contract that specifically stipulated they’re allowed to work remotely, Urrutia explained. Another is unionized employees, where RTO could be a subject of collective bargaining.  

Organizations also must ensure their RTO decisions aren’t discriminatory or unfairly impact groups protected under the Civil Rights Act, Cayer said. The law prohibits employment discrimination based on race, color, sex, national origin, age, disability and medical history. 

Employers are also required to provide reasonable accommodation under the Americans with Disabilities Act or Pregnant Workers Fairness Act, and that might include allowing remote work, Urrutia added. 

“Employees who work from home are not a protected classification, but many employees who work from home are in protected classifications,” she said. 

Still, employees could file a lawsuit if they feel they RTO policies unfairly led them to quit, Cayer added. Organizations can choose to protest the suit. “A lot of times that leads into some settlement,” he said.

29 hospitals, health systems cutting jobs

A number of hospitals and health systems are reducing their workforces or jobs due to financial and operational challenges. 

Below are workforce reduction efforts or job eliminations announced this year. 

Editor’s Note: This webpage was created Jan. 19 and updated May 10. 

May

White Rock Medical Center in Dallas laid off nearly 35% of its staff. The hospital temporarily stopped taking patients transported by emergency medical services due to the layoffs, The Dallas Morning News reported. It has since resumed accepting those patients.

Oakland-based Kaiser Foundation Hospitals is laying off 76 workers in California. The layoffs primarily affect employees in IT and marketing, according to regulatory documents filed with the state May 1.

April

Pittsburgh-based UPMC will lay off approximately 1,000 employees. The layoffs, which represent more than 1% of the health system’s 100,000 workforce will primarily affect nonclinical, administrative and non-member-facing employees. 

Union Springs, Ala.-based Bullock County Hospital laid off 95 employees beginning April 9, according to regulatory documents filed with the state. The layoffs occurred as Bullock seeks to become a rural emergency hospital and is ending psychiatric services as part of the shift, AL.com reported April 25.

Jackson Health System reduced compensation programs for senior leaders; laid off fewer than 25 people, including one hospital CEO; and froze many vacant positions, especially in support and nonclinical areas, a spokesperson for the Miami-based organization confirmed to Becker’s. President and CEO Carlos Migoya shared these efforts in a message to staff, citing financial challenges.

Coos Bay, Ore.-based Bay Area Hospital plans to conduct layoffs as it outsources its revenue cycle management operations, a spokesperson for the hospital confirmed to Becker’s. The transition will affect 27 positions.

Manchester, N.H.-based Catholic Medical Center plans to cut 142 positions, including 54 layoffs. An April 18 letter to employees from CMC president and CEO Alex Walker, obtained by Becker’s, said cuts would occur through the 54 staff eliminations, open position cuts, reduced hours, planned departures, and resource redeployment in satellite locations for CMC.

Marshfield (Wis.) Clinic Health System will lay off furloughed staff, effective in early May. The health system furloughed about 3% of its workforce in January, affecting positions mostly in non-patient-seeing departments, including leadership roles. 

Norwalk, Ohio-based Fisher-Titus Medical Center laid off some workers in nonclinical roles and reduced hours for others. Seven employees, about 0.5% of the health system’s workforce, were laid off  April 1. Work hours were reduced for another 10 positions, a hospital spokesperson told Becker’s.

March

Robbinsdale, Minn.-based North Memorial Health is laying off 103 employees in clinical and nonclinical roles, citing financial challenges. The layoffs affect several services across the two-hospital system. 

AHMC’s San Gabriel (Calif.) Valley Medical Center is laying off 62 workers, according to regulatory documents filed with the state March 13. The layoffs take effect May 13.

Miami-based North Shore Medical Center, part of Steward Health Care, started conducting layoffs as part of cuts to some of its programs amid the Dallas-based health system’s continued financial struggles. Around 152 workers represented by 1199SEIU were laid off, a union spokesperson confirmed. However that number could be higher as their members do not represent every employee at NSMC, the spokesperson said.

Oakland, Calif.-based Kaiser Foundation Hospitals is laying off more than 70 employees. The layoffs primarily affect those in IT roles.

February

Lion Star, the group that operates Nacogdoches (Texas) Memorial Hospital, is closing four of its clinics on March 22, which will result in fewer than 50 layoffs, a Lion Star spokesperson confirmed to Becker’s. No additional layoffs are planned.

Little Rock-based Arkansas Heart Hospital has laid off fewer than 50 employees since the beginning of 2024, citing low reimbursement rates. The layoffs affected lower-paying positions, Bruce Murphy, MD, CEO of the hospital, said, according to Arkansas Business.

Cincinnati-based Mercy Health will lay off some call center positions. The system attributed the move to its partnership with a third party to operate its enterprise contact center for primary care scheduling.

Ridgecrest (Calif.) Regional Hospital announced more layoffs to avoid closure. It is laying off 31 more employees, including seven licensed vocational nurses and four registered nurses, two months after it announced plans to lay off nearly 30 others and suspend its labor and delivery unit, Bakersfield.com reported Feb. 15.

Medford, Ore.-based Asante health system laid off about 3% of its workforce. The layoffs primarily affected administrative and support roles and were necessary to offset “financial headwinds” over the past several years, according to a report from NBC affiliate KOBI-TV, which is based on an internal memo sent to staff Feb. 9. 

Oakdale, Calif.-based Oak Valley Hospital District is scaling back services and laying off workers to improve its finances. The hospital said in a Feb. 2 statement shared with Becker’s that it will close its five-bed intensive care unit, discontinue its family support network department and lay off 28 employees, including those in senior management and supervisor positions. 

Chicago-based Rush University System for Health laid off an undisclosed number of workers in administrative and leadership positions, citing “financial headwinds affecting healthcare providers nationwide.” No additional information was provided about the layoffs, including the number of affected employees.

University of Chicago Medical Center laid off about 180 employees, or less than 2% of its roughly 13,000-person workforce. The majority of affected positions are not direct patient facing, the organization said in a statement shared with Becker’s.

Fountain Valley, Calif.-based MemorialCare laid off 72 workers due to restructuring efforts at its Long Beach (Calif.) Medical Center and Long Beach, Calif.-based Miller Children’s and Women’s Hospital. The layoffs include 13 positions at Long Beach Medical Center’s outpatient retail pharmacy, which is closing Feb. 2, a spokesperson for MemorialCare said in a statement shared with Becker’s.

January

George Washington University Hospital in Washington, D.C., part of King of Prussia, Pa.-based Universal Health Services, is laying off “less than 3%” of its employees. The move is attributed to restructuring efforts.

Amarillo-based Northwest Texas Healthcare System, also part of Universal Health Services, announced plans to lay off a “limited number of positions.” The move is attributed to restructuring efforts. 

Lehigh Valley Health Network is cutting its chiropractic services and laying off 10 chiropractors. The layoffs are effective April 12 and due to restructuring. The Allentown, Pa.-based health system has 10 chiropractic locations, according to its website

Central Maine Healthcare is laying off 45 employees as part of management reorganization. The Lewiston-based system, which also ended urgent care services at its Maine Urgent Care on Sabattus Street in Lewiston on Jan. 12, has 3,100 employees total.

University of Vermont Health Network, based in Burlington, is cutting 130 open positions. The move is part of the health system’s efforts to reduce expenses by $20 million.

Med-Trans, a medical transport provider based in Lewisville, Texas, closed its UF Health ShandsCair base serving Gainesville, Fla.-based UF Health Shands Hospital on Jan. 10 due to decreased transportation demands. The move also resulted in layoffs, a spokesperson for UF Health, the hospital’s parent company, told Becker’s in a statement. 

RWJBarnabas Health, based in West Orange, N.J., is laying off 79 employees, according to documents filed with the state on Jan. 8. The layoffs are effective March 31 and April 5. A spokesperson for the health system told Becker’s that 74 of the positions were “time-limited information technology training job functions.” The other layoffs were due to closure of an urgent care center.

Amid losses, UPMC says it’s laying off roughly 1,000 workers, cutting open positions

UPMC is laying off about 1,000 employees in a “realignment” the nonprofit said will help it face “the realities of a still-evolving, post-pandemic marketplace.”

The layoffs reflect about 1% of UPMC’s total workforce of over 100,000 people and are primarily among nonclinical and administrative staff, Vice President and Chief Communications Officer Paul Wood said in an emailed statement. He said the system will be offering those impacted “enhanced severance pay and benefits coverage.”

The “limited reductions” will also involve the closing of open positions, the elimination of redundancies and “other actions,” Wood said.

“This realignment will not alter UPMC’s investments in our communities, facilities, commitment to clinical care and research, strategic growth or to offering those throughout our workforce industry-leading benefits,” Wood wrote in the statement.

Pittsburgh-based UPMC is an integrated health system and one of Pennsylvania’s largest employers. Its provider, insurance and other business arms logged $27.7 billion of revenue across 2023 as volumes rose and insurance membership grew.

However, the nonprofit reported a $198.3 million operating loss (-0.7% operating margin) last year as insurance claims expenses jumped 13.6% and labor costs rose 6.4%. It had posted a $162 million operating gain (0.6% operating margin) the year before.


UPMC reports almost $200M operating loss as expenses rise

The system did narrow its 2023 bottom line loss to $31 million thanks to its investment returns, though it had logged roughly a billion in net losses during the 2022 fiscal year.

In its year-end financial report, UPMC’s management wrote that “even with increased expenses to deliver high-quality care as a result of various economic factors, in 2023 UPMC continued to forge ahead with investments to grow access to world-class clinical care … advance healthcare excellence through quality and innovation, care for our communities, grow our insurance services and invest in our future workforce.”

Layoffs cool as hospital margins stabilize

Layoffs are slowing at hospitals and health systems as margins gradually improve, but CFOs continue to focus on controlling costs — particularly on the labor and supply fronts — to secure the long-term sustainability of their organizations.

Last year was characterized by hospital and health systems big and small trimming their workforces due to financial and operational challenges. 

From October 2022 through December 2023, Becker’s reported on more than 100 hospitals and health systems across the country that laid off workers, eliminated positions or reduced or closed certain facilities and services to help shore up finances. 

While layoffs have been reported at some hospitals this year, workforce cuts have been occuring at a slower rate compared to last year. 

Hospital revenues are up year over year as patient volumes continue to rebound. Operating margins have fluctuated in the last 12 months, from a -1.2% low in February 2023 to 5.5% highs in June and December, according to Kaufman Hall. In January, average operating and operating EBITDA margins dropped to 5.1%.

Kaufman analysts noted that too many hospitals are losing money and high-performing hospitals doing better and better, “effectively pulling away from the pack.” 

Fitch Ratings has described 2024 as another “make or break” year for a significant portion of the nonprofit hospital sector, which continues to battle an ongoing “labordemic.” However, the U.S. has also avoided a recession so far, partly due to a robust healthcare job market, according to The Wall Street Journal.