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Philadelphia hospital to lay off 175 employees amid financial troubles
Philadelphia-based Hahnemann University Hospital plans to lay off 175 nurses, support staff and managers as it struggles to keep its doors open, hospital officials told philly.com.
“We are in a life-or-death situation here at Hahnemann,” said Joel Freedman, chairman and founder of American Academic Health System, which bought Hahnemann and St. Christopher’s Hospital for Children from Dallas-based Tenet Healthcare in January 2018.
“We’re not Tenet with endless cash. We’re running out of money,” Mr. Freedman added.
He told philly.com Hahnemann won’t stay afloat without help from government, insurers and its academic partner, Philadelphia-based Drexel University.
The layoffs, which represent about 6 percent of Hahnemann’s total workforce of 2,700, reportedly affect 65 nurses, 22 service and technical employees, and 88 nonunion workers and managers.
They come as Hahnemann has struggled financially. The hospital and and St. Christopher’s combined have $600 million to $700 million in annual revenue, compared to $790 million at the time of American Academic Health System’s purchase, according to philly.com.
Mr. Freedman, who is also CEO of healthcare investment firm and American Academic Health System affiliate El Segundo-based Paladin Healthcare, partially attributed the struggles at Hahnemann to a lower volume of patients. He also cited information technology and documentation problems at the hospital.
He expects the layoffs, along with other cost-cutting initiatives, such as the closure of some primary care offices, to save Hahnemann $18 million annually.
Read the full philly.com report here.
Nicklaus Children’s Hospital to freeze wages, lay off staff
Miami-based Nicklaus Children’s Hospital is making cutbacks in response to industry pressures, including dwindling reimbursement, according to the Miami Herald.
Nicklaus Children’s executives outlined the cutbacks in a memo to staff obtained by the Miami Herald. The hospital will eliminate pay raises for all employees this year, limit the number of new hires and reduce pension contributions, according to the report.
These cutbacks could create significant savings for Nicklaus Children’s, which has roughly 3,500 workers. Labor costs make up 57 percent of the hospital’s operating expenses, according to the report.
The letter to staff also said it is necessary for Nicklaus Children’s to reduce the size of its workforce to lower operating expenses.
In a written statement to the Miami Herald, a hospital spokesperson said the cutbacks and layoffs will help preserve the hospital’s financial position in the face of several industrywide challenges, including “reductions in reimbursement … a shift from inpatient services to outpatient care, and financial pressures due to rising costs and increased competition.”
Access the full Miami Herald article here.
Adventist Health to lay off 1,300+, keep wildfire-damaged hospital closed
Adventist Health finalizes layoffs at Feather River Hospital
Roseville, Calif.-based Adventist Health will not reopen its hospital in Paradise, Calif., and finalized more than 1,300 layoffs, according to the Paradise Post.
Adventist Health submitted a required Worker Adjustment and Retraining Notification letter to the state Jan. 8 explaining that more than 1,300 full- and part-time employees would be affected by the closure of Adventist Health Feather River.
The health system conducted a town hall meeting for employees in December 2018 and sent an email to employees about the hospital’s closure.
Adventist Health previously told the San Francisco Chronicle the hospital was severely damaged by the Camp Fire, the largest wildfire in U.S. history that burned at least 153,336 acres and destroyed at least 19,000 buildings, according to USA Today.
Officials told the Chronicle the hospital would not be restored until maybe 2020, but that all employees would receive their full salaries through Feb. 5 and full health benefits until May, according to the Paradise Post.
Officials said employees are encouraged to take advantage of services offered by the health system to assist in the employment search.
To access the full report, click here.
Bay Medical to lay off up to half of 1,450 staff
Panama City, Fla.-based Bay Medical Sacred Heart revealed on Dec. 4 it expects to lay off 635 staff members early next year once it reopens, according to a news release obtained by the Panama City News Herald.
Bay Medical sustained heavy wind and water damage when Hurricane Michael hit the U.S. coastline in October, and has ceased all operations apart from its emergency room since the storm. Officials said they plan to reopen the hospital in stages starting soon after Jan. 1. However, the hospital will reopen at one-fourth of its previous 323-bed size.
The first phase of the reopening will include 75 inpatient beds with eight operating rooms and five catheterization labs, according to the report.
Hospital officials said in the Dec. 4 news release they plan to keep about half of the 1,450-person staff after Feb. 4, 2019, after the hospital reopens. A hospital board of trustee member told the Panama City News Herald “all levels of service will be affected, from department heads to the maintenance guys.” About one-third of the affected individuals are part-time, as needed or temporary employees, a hospital spokesperson told Becker’s.
Bay Medical has continued to pay employees and provide benefits since the hurricane and will continue to pay employees and fund benefits through Feb. 4 and Feb. 28, respectively.
“We are heartbroken to share this news at such a difficult time,” Bay Medical CEO Scott Campbell said in the Dec. 4 news release. “The decision to reduce our workforce has been incredibly difficult, but necessary to ensure our ability to continue providing care to the community and preserve critical services.”
The hospital is also in the midst of a transfer of control. Bay Medical’s owner, Nashville, Tenn.-based Ardent Health Services, recently signed a letter of intent to transfer its controlling interest in the hospital to St. Louis-based Ascension.
To aid in the workforce transition, Ascension said it plans to hold a job fair tentatively scheduled for Dec. 10-11. In a Dec. 4 statement to the Panama City News Herald, Ascension and Ardent said they are committed to hiring as many eligible employees as possible for openings in their systems.
To access the full report, click here.
Pennsylvania hospital closure will result in 505 layoffs
Harrisburg, Pa.-based UPMC Pinnacle will close its hospital in Lancaster, Pa., March 1, and lay off the hospital’s 505 employees.
The health system announced plans in December to close UPMC Pinnacle Lancaster and transition inpatient services to UPMC Pinnacle Lititz (Pa.). The two hospitals are about 7 miles apart.
The transition of inpatient services from the Lancaster hospital to the Lititz hospital will be completed by March. When the Lancaster hospital shuts down, 505 employees will be laid off, according to a Worker Adjustment and Retraining Notification Act notice filed by UPMC Pinnacle.
However, some employees may transfer to other UPMC Pinnacle facilities.
“Although employees do not have bumping rights into occupied positions, we do have a number of open positions for which many of the affected individuals would qualify,” Ann H. Gormley, senior vice president of human services for UPMC Pinnacle, wrote in the notice, according to the Central Penn Business Journal. “Employees are being provided notice and are encouraged to apply for vacant UPMC Pinnacle affiliate positions in which to seek a transfer.”
Swedish Health Services cuts 550 jobs
Seattle-based Swedish Health Services is eliminating about 550 jobs, which represents about 4 percent of the health system’s 13,500-person workforce, according to The Seattle Times.
The job cuts are part of the system’s ongoing reorganization plan. In a memo to employees, Swedish Health CEO Guy Hudson, MD, said the system is cutting jobs and making other changes to shift to a “more cost-effective model of care” that involves investing more in outpatient care and focusing less on hospital care, according to the report.
Swedish Health declined to say which positions or programs would be affected by the job cuts. The system intends to inform employees by Sept. 14.
Although the system is scaling back its workforce in some areas, Swedish Health plans to add new staff to support other service lines, including adding physician assistants and registered nurse practitioners to some of its primary care clinics.
Steward Ohio hospital ups layoffs to 468 as closure looms
Dallas-based Steward Health Care issued a revised notice Aug. 17 indicating job losses from the pending closure of one of its hospitals in Ohio will affect approximately 80 more people than previously reported, according to the Ohio Department of Job and Family Services.
Steward revealed plans last week to close Youngstown-based Northside Regional Medical Center on Sept. 20. The health system initially stated it would lay off all of the facility’s 388 employees, according to a WARN notice filed Aug. 15.
However, a revised WARN notice dated Aug. 17 indicates the closure will affect 468 employees. All hospital workers will be paid through Oct. 14.
Steward acquired Northside Regional and seven other facilities from Franklin, Tenn.-based Community Health Systems last year.
Area healthcare leaders expressed dismay over the planned closure to The Business Journal, but said the move was not entirely unexpected.
IBM Watson slashed workforce this week
With one employee describing the layoffs as a cost-cutting measure, estimates say Big Blue may have cut as much as 70 percent of its employees.
After multiple press reports said IBM Watson laid off 50-70 percent of its workforce, a research note published by investment banking company Morgan Stanley on May 31 pushed back on that percentage. IBM, for its part, said the layoffs were small.
“First, any layoffs come on the back of IBM’s reported $613 million restructuring announced on the April 17th earnings call – of which, about $100 million related to the Cognitive business division,” according to Morgan Stanley. “IBM management, as recently as the March 8th, 2018 investor day, discussed aggressive hiring in strategic areas, including Oncology within Watson Health.”
“IBM is continuing to reposition our team to align with our focus on the high-value segments of the IT market,” the company said in a statement. “We’re not discussing specific numbers of employees affected, but it’s a small percentage of our global Watson Health workforce, as we move to more technology-intensive offerings, simplified processes and automation to drive speed.”
That said, the cuts appear to run deep enough to affect some of IBM’s stellar acquisitions: Explorys, Phytel, Merge Healthcare and Truven Health Analytics.
IBM announced at HIMSS15, it would be acquiring population health company Phytel and Cleveland Clinic spinoff Explorys, a cloud-based data analytics vendor. Both Phytel and Explorys would become part of IBM’s new Watson Health unit.
IBM officials also announced then, the establishment of IBM Watson Health, a new business unit that would be headquartered in the Boston area, and a new partnership with leading companies, including Apple, Johnson & Johnson and Medtronic to help optimize consumer and medical devices for data collection, analysis and feedback.
In February 2016, IBM announced it would pay $2.6 billion to acquire Truven Health Analytics for its Watson Health unit. IBM Watson paid $1 billion for Merge in December 2015.
Then in February 2017, MD Anderson, which is part of the University of Texas, ended what had appeared to be a promising partnership with MD Anderson Cancer Center, However, auditors at the University of Texas noted the work cost MD Anderson more than $62 million, without achieveing any of its goals.
With reports suggesting that Big Blue laid off up to 70 percent of the workforce at its Watson Health operation, one former employee wrote on The Layoff.com that
“Watson Health went from 7000 employees to less than 4000 in the last 5 days. All in the Provider business and WH Cloud GONE. The Simpler Provider team will be next month.”
HENRY KOTULA 