Many U.S. hospitals are turning to layoffs to cut costs as they recover from the financial hit of the COVID-19 pandemic.
Here are seven hospitals or health systems that recently announced layoffs or job cuts:
1. Mishawaka, Ind.-based Franciscan Health will lay off 83 employees of its 100-year-old hospital in Hammond, Ind., according to a notice filed with the state. The layoff notice comes as the health system works to shrink the 226-bed Franciscan Health Hammond Hospital to an eight-bed acute care facility with an emergency department and primary care practice. The layoffs are slated to begin Aug. 21 and will be permanent, the health system said.
2. HealthAlliance of the Hudson Valley, a three-hospital system in the Westchester Medical Center Health Network, laid off an undisclosed number of workers June 14. Westchester Medical Center Health Network in Valhalla, N.Y., said it laid off HealthAlliance hospital employees in Kingston, N.Y., to eliminate redundancies as it begins to consolidate inpatient services to one location.
3. As part of a financial restructuring plan, Sacramento, Calif.-based Sutter Healthwill issue another round of layoffs this year. The health system said in early June it plans to lay off 400 employees. These newly announced layoffs are in addition to 277 information technology jobs that were cut April 2. Sutter said most of the new layoffs affect employees in administrative positions in benefits, human resources, data services and accounting. The layoff notice said many of these employees were working remotely or in the field.
4. A little over a month after filing a notice to complete about 651 layoffs this year, Ascension Technologies, the IT subsidiary of St. Louis-based Ascension,eliminated 92 remote IT jobs in Indiana, according to a June 3 report. Most of the laid-off employees are based in Indianapolis and Evansville, Ind., the Indiana Department of Workforce Development said June 2
5. Lawrence (Mass.) General Hospital plans to lay off 56 employees and is warning of more cuts unless it receives government aid quickly, according to a May 25 report. The layoffs will affect employees working in administration and patient care. The layoffs affect about 2.5 percent of the 186-bed hospital’s workforce. Lawrence General attributed the layoffs to the COVID-19 pandemic weakening its financial profile.
6. Boca Raton, Fla.-based Cancer Treatment Centers of America closed its hospital in Tulsa, Okla. About 400 employees will be affected by the closure. The hospital saw its last patient on May 27.
7. Boca Raton, Fla.-based Cancer Treatment Centers of America is selling its hospital in Philadelphia and will lay off the facility’s 365 employees, according to a closure notice filed with the state. The cancer care network said it anticipates the layoffs in Philadelphia will begin after May 30.
An argument for humility in the face of pandemic forecasting unknown unknowns.
“Are we battling an unprecedented pandemic or panicking at a computer generated mirage?” I asked at the beginning of the COVID-19 pandemic on March 18, 2020. Back then the Imperial College London epidemiological model’s baseline scenario projected that with no changes in individual behaviors and no public health interventions, more than 80 percent of Americans would eventually be infected with novel coronavirus and about 2.2 million would die of the disease. This implies that 0.8 percent of those infected would die of the disease. This is about 8-times worse than the mortality rate from seasonal flu outbreaks.
Spooked by these dire projections, President Donald Trump issued on March 16 his Coronavirus Guidelines for America that urged Americans to “listen to and follow the directions of STATE AND LOCAL AUTHORITIES.” Among other things, Trump’s guidelines pressed people to “work or engage in schooling FROM HOME whenever possible” and “AVOID SOCIAL GATHERINGS in groups of more than 10 people.” The guidelines exhorted Americans to “AVOID DISCRETIONARY TRAVEL, shopping trips and social visits,” and that “in states with evidence of community transmission, bars, restaurants, food courts, gyms, and other indoor and outdoor venues where people congregate should be closed.”
Let’s take a moment to recognize just how blindly through the early stages of the pandemic we—definitely including our public health officials—were all flying at the time. The guidelines advised people to frequently wash their hands, disinfect surfaces, and avoid touching their faces. Basically, these were the sort of precautions typically recommended for influenza outbreaks. On July 9, 2020, an open letter from 239 researchers begged the World Health Organization and other public health authorities to recognize that COVID-19 was chiefly spread by airborne transmission rather than via droplets deposited on surfaces. The U.S. Centers for Disease Control and Prevention (CDC) didn’t update its guidance on COVID-19 airborne transmission until May 2021. And it turns out that touching surfaces is not a major mode of transmission for COVID-19.
The president’s guidelines also advised, “IF YOU FEEL SICK, stay home. Do not go to work.” This sensible advice, however, missed the fact that a huge proportion of COVID-19 viral transmission occurred from people without symptoms. That is, people who feel fine can still be infected and, unsuspectingly, pass along their virus to others. For example, one January 2021 study estimated that “59% of all transmission came from asymptomatic transmission, comprising 35% from presymptomatic individuals and 24% from individuals who never develop symptoms.”
The Imperial College London’s alarming projections did not go uncontested. A group of researchers led by Stanford University medical professor Jay Bhattacharya believed that COVID-19 infections were much more widespread than the reported cases indicated. If the Imperial College London’s hypothesis were true, Bhattacharya and his fellow researchers argued, that would mean that the mortality rate and projected deaths from the coronavirus would be much lower, making the pandemic much less menacing.
The researchers’ strategy was to blood test people in Santa Clara and Los Angeles Counties in California to see how many had already developed antibodies in response to coronavirus infections. Using those data, they then extrapolated what proportion of county residents had already been exposed to and recovered from the virus.
Bhattacharya and his colleagues preliminarily estimated that between 48,000 and 81,000 people had already been infected in Santa Clara County by early April, which would mean that COVID-19 infections were “50-85-fold more than the number of confirmed cases.” Based on these data the researchers calculated that toward the end of April “a hundred deaths out of 48,000-81,000 infections corresponds to an infection fatality rate of 0.12-0.2%.” As I optimistically reported at the time, that would imply that COVID-19’s lethality was not much different than for seasonal influenza.
Bhattacharya and his colleagues conducted a similar antibody survey in Los Angeles County. That study similarly asserted that COVID-19 infections were much more widespread than reported cases. The study estimated 2.8 to 5.6 percent of the residents of Los Angeles County had been infected by early April. That translates to approximately 221,000 to 442,000 adults in the county who have had the infection. “That estimate is 28 to 55 times higher than the 7,994 confirmed cases of COVID-19 reported to the county by the time of the study in early April,” noted the accompanying press release. “The number of COVID-related deaths in the county has now surpassed 600.” These estimates would imply a relatively low infection fatality rate of between 0.14 and 0.27 percent.
Unfortunately, from the vantage of 14 months, those hopeful results have not been borne out. Santa Clara County public health officials report that there have been 119,712 diagnosed cases of COVID-19 so far. If infections were really being underreported by 50-fold, that would suggest that roughly 6 million Santa Clara residents would by now have been infected by the coronavirus. The population of the county is just under 2 million. Alternatively, extrapolating a 50-fold undercount would imply that when 40,000 diagnosed cases were reported on July 11, 2020, all 2 million people living in Santa Clara County had been infected by that date.
Los Angeles County reports 1,247,742 diagnosed COVID-19 cases cumulatively. Again, if infections were really being underreported 28-fold, that would imply that roughly 35 million Angelenos out of a population of just over 10 million would have been infected with the virus by now. Again turning the 28-fold estimate on its head, that would imply that all 10 million Angelenos would have been infected when 360,000 cases had been diagnosed on November 21, 2020.
COVID-19 cases are, of course, being undercounted. Data scientist Youyang Gu has been consistently more accurate than many of the other researchers parsing COVID-19 pandemic trends. Gu estimates that over the course of the pandemic, U.S. COVID-19 infections have roughly been 4-fold greater than diagnosed cases. Applying that factor to the number of reported COVID-19 cases would yield an estimate of 480,000 and 5,000,000 total infections in Santa Clara and Los Angeles respectively. If those are ballpark accurate, that would mean that the COVID-19 infection fatality rate in Santa Clara is 0.46 percent and is 0.49 percent in Los Angeles. Again, applying a 4-fold multiplier to take account of undercounted infections, those are both just about where the U.S. infection fatality rate of 0.45 percent is now.
The upshot is that, so far, we have ended up about half-way between the best case and worst case scenarios sketched out at the beginning of the pandemic.
We rarely see the impact of policies reflected in data in real time. The COVID-19 pandemic changed that. In the present moment, a range of government, private, and academic sources catalogue household-level health and economic information to enable rapid policy analysis and response. To continue promoting periodic findings, identifying vulnerable populations, and maintaining a focus on public health, frequent national data collection needs to be improved and expanded permanently.
Knowledge accumulates over time, facilitating new advancements and advocacy. While mRNA biotechnology was not usable decades ago, years of public research helped unlock highly effective COVID-19 vaccines. The same can be true for advancing effective socioeconomic policies. More national, standardized data like the Census Bureau’s Household Pulse Survey will accelerate progress. At the same time, there are significant issues with national data sources. For instance, COVID-19 data reported by the CDC faced notable quality issues and inconsistencies between states.
Policymakers can’t address problems that they don’t know exist. Researchers can’t identify problems and solutions without adequate data. We can better study how policies impact population health and inform legislative action with greater federal funding dedicated to wide-ranging, systematized population surveys.
Broader data collection enables more findings and policy development
Evidence-based research is at the core of effective policy action. Surveillance data indicates what problems families face, who is most affected, and which interventions can best promote health and economic well-being. These collections can inform policy responses by reporting information on the demographics disproportionately affected by socioeconomic disruptions. Race and ethnicity, age, gender, sexual orientation, household composition, and work occupation all provide valuable details on who has been left behind by past and present legislative choices.
Since March 2020, COVID-19 cases and deaths, changes in employment, and food and housing security have been tracked periodically with detailed demographic information through surveys like the Both cumulative statistical compilations and representative surveillance polling have been instrumental to analyses. Our team has recorded over 200 state-level policies in the COVID-19 US State Policy (CUSP) database to further research and journalistic investigations. We have learned a number of policy lessons, from the health protections of eviction moratoria to the food security benefits of social insurance expansions. Not to be forgotten is the importance of documented evidence to these insights.
Without this comprehensive tracking, it would be difficult to determine the number of evictions occurring despite active moratoria, what factors contribute to elevated risk of COVID-19, and the value of pandemic unemployment insurance programs in states. The wider number of direct and indirect health outcomes measured have bolstered our understanding of the suffering experienced by different demographic groups. These issues are receiving legislative attention, in no small part due to the broad statistical collection and subsequent analytical research on these topics.
Insufficient data results in inadequate understanding of policy issues
The more high-quality data there is, the better. With the state-level policies present in CUSP, our team and other research groups quantified the impact of larger unemployment insurance benefit sizes, greater minimum wages, mask mandates, and eviction freezes. These analyses have been utilized by state and federal officials. None would have been possible without increased data collection.
However, our policy investigations are constrained by the data availability and quality on state and federal government websites, which may be improved with stimulus funds allocated to modernize our public health data infrastructure. Some of the most consequential decision-making right now relates to vaccine distribution and administration, but it is difficult to disaggregate state-level statistics. Many states lack demographic information on vaccine recipients as well as those that have contracted or died from COVID-19. Even though racial disparities are present in COVID-19 cases, hospitalizations, and deaths nationally, we can’t always determine the extent of these inequities locally. These present issues are a microcosm of pre-existing problems.
Data shortcomings present for years, in areas like occupational safety, are finally being spotlighted due to the pandemic. Minimal national and state workplace health data translated to insufficient COVID-19 surveillance in workplace settings. Studies that show essential workers are facing elevated risk of COVID-19 are often limited in scope to individual states or cities, largely due to the lack of usable and accessible data. More investment is needed going forward beyond the pandemic to better document a Otherwise there will continue to be serious blind spots in the ability to evaluate policy decisions, enforce better workplace standards, and hold leaders accountable for choices.
These are problems with a simple solution: collect more information. Now is not the time to eliminate valuable community surveys and aggregate compilations, but to expand on them. More comprehensive data will provide a spotlight on current and future legislative choices and improve the understanding of policies in new ways. It is our hope that are built upon and become the new norm.
Disclosure: Funding received from Robert Wood Johnson Foundation was used to develop the COVID-19 US State Policy Database.
Across the street from the Buckingham Palace Garden and an ocean away from its Ohio headquarters, Cleveland Clinic is making a nearly $1 billion bet that Europeans will embrace a hospital run by one of America’s marquee health systems.
Cleveland Clinic London, scheduled to open for outpatient visits later this year and for overnight stays in 2022, will primarily offer elective surgeries and other profitable treatments for the heart, brain, joints and digestive system. The London strategy attempts to attract a well-off, privately insured population: American expatriates, Europeans drawn by the clinic’s reputation, and Britons impatient with the waits at their country’s National Health Service facilities. The hospital won’t offer less financially rewarding business lines, like emergency services.
“There are very few people out there in the world who would not choose to have Cleveland Clinic as their health care provider,” said chief executive Dr. Tomislav Mihaljevic.
Facing the prospect of stagnant or declining revenues at home, around three dozen of America’s elite hospitals and health systems are searching with a missionary zeal for patients and insurers able to pay high prices that will preserve their financial successes.
For years, a handful of hospitals have partnered with foreign companies or offered consulting services in places like Dubai, where Western-style health care was rare and money plentiful. Now a few, like the clinic, are taking on a bigger risk — and a potentially larger financial reward.
These foreign forays prompt questions about why American nonprofit health systems, which pay little or no taxes in their hometowns, are indulging in such nakedly commercial ventures overseas. The majority of U.S. hospitals are exempt from taxes because they provide charity care and other benefits to their communities. Nonprofit hospitals routinely tout these contributions, though studies have found they often amount to less than the tax breaks.
Despite their tax designation, nonprofit hospitals are as aggressive as commercial hospitals in seeking to dominate their health care markets and extract prices as high as possible from private insurers. Though they do not pay dividends, some nonprofits amass large surpluses most years even as more and more patients are covered by Medicare and Medicaid, the U.S. government’s insurance programs for the elderly, disabled and poor, which pay less than commercial insurance. Cleveland Clinic, one of the wealthiest, ran an 11% margin in the first three months of this year and paid Mihaljevic $3.3 million in 2019, the most recent salary disclosed.
The advantages of international expansion for their local communities are tenuous. Venturing overseas does not provide Americans with the direct or trickle-down benefits that investing locally does, such as construction work and health care jobs. Even when hospitals abroad add to the bottom line, the profits funneled home are minimal, according to the few financial documents and tax returns that disclose details of the operations.
“It’s a distraction from the local mission at a minimum,” said Paul Levy, a former chief executive at Boston’s Beth Israel Deaconess Medical Center and now a consultant. “People get into them at the beginning, thinking this is easy money. The investment bankers get involved because they get the financing, and the senior faculty get on board and say, ‘This is great; it means I can go to Italy for two years’ — and there’s not a real business plan.”
There are financial hazards. For instance, Cleveland Clinic has warned bondholders that its performance could suffer if its London project does not launch as planned. There are also risks to a system’s reputation if a foreign venture goes awry.
Finance experts temper expectations that operations of overseas hospitals will have a major bearing on a system’s balance sheet. “Even though they do well, they’re small hospitals — they’re never part of the overall picture,” said Olga Beck, a senior director at Fitch Ratings. “It does help [the U.S. operations] because it gives a global name and presence in other markets.”
Hospital executives say their foreign ventures provide an additional source of revenue, thus adding stability, and benefit the care of their hometown patients.
“As we go to different areas around the world, we learn and we continuously improve for all our patients,” said Dr. Brian Donley, CEO of Cleveland Clinic London. He said the clinic has learned from U.K. practices more efficient ways to sterilize surgical instruments and perform X-rays.
For decades, wealthy foreigners — who are willing to pay the list prices for specialized surgeries and cancer care that domestic insurers bargain down — have been appealing targets for U.S. hospitals. Hospitals like MedStar Health’s Georgetown University Hospital in Washington, D.C., assist foreign patients with special offices staffed by people with job titles such as “international services coordinator” and “international services finance administrator.”
Between July 2019 and June 2020, U.S. hospitals treated more than 53,000 foreign patients, charging them more than $2.8 billion, according to a survey of members by the Chicago-based U.S. Cooperative for International Patient Programs. In addition, instead of just importing patients, 37 of 51 health systems in the survey said they offer international advisory or consulting services abroad.
“‘Send us your patients’ is pretty much a dying approach,” said Steven Thompson, a consultant who has spearheaded international programs for Baltimore’s Johns Hopkins Medicine and Boston’s Brigham and Women’s Hospital. “People see it on both sides for what it is: a one-way relationship.”
One of the oldest foreign ventures is the organ transplant program the Pittsburgh-based nonprofit system UPMC has run in Palermo, Italy, since 1997, when Sicily’s government and Italian insurers realized it would be cheaper to perform those procedures there than continue to send patients to the U.S. Since then, UPMC’s Palermo facility has performed more than 2,300 transplants.
In this initial expansion, the U.S. hospital was providing a highly specialized type of surgery — one that UPMC is renowned for — that was not available locally. But UPMC, one of the most entrepreneurial U.S. health systems, didn’t stop there. In Ireland, UPMC owns a cancer center and provides care for concussions through sports medicine clinics. Since 2018, the system has acquired hospitals in Waterford, Clane and Kilkenny. They are staffed mostly by independent Irish physicians, but UPMC regularly sends over its leading U.S. specialists to lend expertise, according to Wendy Zellner, a UPMC spokesperson.
UPMC has company in Ireland: in 2019, Bon Secours Mercy Health, a Roman Catholic system with hospitals in Eastern states, merged with a five-hospital Catholic system there.
Over the past two decades, UPMC did advisory and consulting work in 15 countries but ultimately decided to narrow its involvement to four: Italy, Ireland, China and Kazakhstan, where UPMC is helping a university develop a medical teaching hospital. Charles Bogosta, president of UPMC International, said UPMC wanted to focus its efforts where it was confident it could improve the quality of care, bolster UPMC’s reputation and earn profit margins greater than its U.S. hospitals do.
UPMC officials said the economics are favorable abroad because labor is cheaper and the mix of patients is heavily tilted toward those with commercial insurance, which pays better than government programs.
“What we’ve been doing overseas has been really helpful in addressing what everyone in the U.S. is trying to do, which is come up with diversified revenue sources,” Bogosta said.
Even so, that extra revenue remains a small part of UPMC’s earnings. The health system’s foreign hospital business generated gross revenues of $96 million, or 1% of UPMC’s $9.3 billion total hospital revenues in 2019, according to a KHN analysis of a UPMC financial disclosure. Since that figure is before accounting for the costs of running the hospitals, taxes and other expenses, the actual profits the foreign hospitals might send back to Pittsburgh are much smaller. In Ireland, where corporations are required to disclose audited financial statements, UPMC Investments Ltd., an umbrella group that owns the Waterford hospital operation and property, reported net profits of about a half-million dollars in 2019 on more than $47 million in gross revenues.
In an email, Zellner said the Ireland statements “do not give you the totality of the picture in Ireland or International, where our results are far better than these documents would suggest.” UPMC declined to provide more detailed financial data.
Like other systems, UPMC has expanding ambitions in China. In 2019 it signed an agreement with the multinational corporation Wanda Group to help manage several “world-class” hospitals, starting with one opening in Chengdu next year.
But foreign ventures can misfire. “These partnerships can turn into nightmares, as Hopkins has learned,” Thompson wrote in a 2012 article for the Harvard Business Review that described his observations as the founder and first CEO of Johns Hopkins Medicine International, a for-profit venture jointly owned by Johns Hopkins Medicine and Johns Hopkins University.
Anadolu Medical Center, which Hopkins helped establish in Istanbul in 2005, was “plagued by quality problems,” including overbooked operating rooms and physicians who refused to follow evidence-based procedures and quality protocols, he wrote. Thompson attributed the problem to the Turkish mandate that the hospital be run by a Turkish citizen and wrote that the problems did not dissipate until Hopkins was allowed to install its own manager in the second-highest position and dissolve the top position to get around the citizenship requirement “while remaining in technical compliance with the law.”
While “the project is now thriving,” he warned that “lending the Hopkins name to a hospital that delivers unimpressive care could significantly damage our 135-year-old brand — and that’s a real danger in developing areas, especially in a project’s early days.”
Hopkins has remained skittish about outright ownership or even management responsibilities. Instead, it has affiliations with hospitals and health systems in 13 countries, including Vietnam, China, Turkey, Lebanon, Brazil and Saudi Arabia. Hopkins does not run any of the hospitals but helps develop hospital master plans and clinical programs, trains doctors, and advises on patient safety and infection control.
Even so, in 2014 it created a joint venture with the oil and gas company Saudi Aramco to provide health care to 255,000 employees and their dependents and retirees. Hopkins, which owns a fifth of the venture, said all foreign net revenue is returned to the system’s parent organizations to fund research, expansion of care and scholarships. But its public records report meager income from its foreign subsidiary, just $7 million in 2018 — a tenth of a percent of the health system’s $7 billion revenues.
Charles Wiener, the current president of Johns Hopkins Medicine International, focused on other benefits. “If we can put in robust quality and safety at one of our affiliates, their patients do better,” he said. “If we can export our education and training models, we believe that allows our people to benefit from learning from other cultures, and some of their people come here to train.”
Cleveland Clinic London is unusual in that U.S. health systems rarely build a hospital abroad from scratch without a local partner. The clinic chose that more cautious approach with Cleveland Clinic Abu Dhabi, a 364-bed hospital owned by the Mubadala Investment Co. that the clinic manages. It also has a consulting practice that is helping a Singapore health care company build a hospital in Shanghai.
Foreign enterprises appeal to the clinic because it has limited growth opportunities in Ohio, where the population is growing slowly and aging, meaning more patients are leaving high-paying commercial insurers for lower-paying Medicare. The clinic has expanded in Florida, acquiring five hospitals to take advantage of population increases and wealthier patients there.
The London project will have 184 beds and eight operating rooms. Donley said it will be staffed primarily by U.K. physicians, including ones who also work for the National Health Service.
“The clinic has a long track record of being able to execute on its strategies,” said Lisa Martin, an analyst at the bond rating agency Moody’s Investors Service. “The London project is obviously the biggest venture and the biggest financial risk that they’ve made abroad.”
CORRECTION: This story was corrected on June 22, 2021, at 9:20 a.m. ET. MedStar Health’s Georgetown University Hospital does not solicit foreign patients.
HENRY KOTULA 