Ochsner Well being, the state’s largest hospital system and certainly one of its largest personal employers, plans to lay off 770 workers throughout its 42 hospitals and greater than 200 pressing care and well being facilities in Louisiana and Mississippi.
The layoffs, that are the biggest in Ochsner’s historical past, signify 2% of the system’s 38,000-person workforce.
The cuts won’t have an effect on docs, nurses and different patient-facing workers, in response to Ochsner CEO Pete November. Staff in administration, administrative jobs and clerical positions will see the majority of the cuts, which might be unfold evenly throughout the establishment’s amenities in each states.
Ochsner isn’t closing or consolidating any of its amenities, that are concentrated in New Orleans and embody Baton Rouge, Lafayette, Lake Charles, Shreveport and the Mississippi Gulf Coast.
The cuts, that are anticipated to save lots of the system between $125 million and $150 million a yr, come amid skyrocketing well being care prices within the wake of the COVID-19 pandemic and on the heels of Ochsner’s first unprofitable yr in additional than a decade.
November notified workers of the pending layoffs in a companywide e mail Thursday morning.
“This isn’t a call our government management crew takes evenly or one we ever wished to make,” the e-mail stated. “It’s the hardest change we have now ever needed to make at Ochsner, however one we should to make sure we proceed to be a powerful group.”
November, who took the highest job on the nonprofit hospital system final yr, vowed that these cuts would be the first and the final.
“We would like everybody to know that after we are completed with this spherical we’re performed. That is it,” stated November in an interview. “People shouldn’t have to come back to work every single day anxious about what comes subsequent.”
Ochsner is the most recent of some three dozen well being methods within the U.S. to implement layoffs for the reason that starting of the yr. That’s on prime of some three dozen methods that diminished their workforce within the latter half of 2022, in response to nationwide trade studies.
Consultants say Ochsner will not be the final to make cuts as hovering labor and drug prices, coupled with meager progress in Medicare and Medicaid reimbursement charges, push hospital methods to slash jobs and bills.
Wage will increase, pushed partially by the necessity for non permanent or journey nurses for the reason that pandemic started, have performed a big position in driving up prices, in response to San Diego-based well being care advisor Nate Kaufman.
In the meantime, since 2014, Medicaid reimbursement charges have elevated simply 1% on common, whereas Medicare charges have elevated simply 2%, stated Kaufman.
“Medicare and Medicaid aren’t maintaining with hyperinflation and personnel prices are growing,” Kaufman stated. “Well being methods try to steadiness that system, and the one manner to try this is to maintain prices below management.”
From 2019 by means of 2022, Ochsner’s price of medical provides, gear and medicines elevated 10%, in response to hospital officers. Total labor prices have elevated 9%. Beginning final summer season, the federal authorities stopped overlaying the price of journey nurses, which have elevated eightfold.
Although Ochsner’s revenues grew to $6.4 billion in 2022 from $5.9 billion in 2021, it misplaced $96 million final yr and its bills exceeded revenues by 1.5%.
Cuts and shortages
The layoffs at Ochsner are taking place on the similar time that it’s struggling to seek out nurses and different medical workers. The system at the moment has some 800 unfilled nursing positions, which November stated has elevated the price of offering affected person care.
The cuts additionally come after years of aggressive progress on the well being system. Beneath November’s predecessor, Warner Thomas, who stepped down final fall to run California-based Sutter Well being, Ochsner grew from eight hospitals a decade in the past to over 40 hospitals at the moment, and expanded from its base within the New Orleans space throughout Louisiana and into Mississippi.
As lately as February, it lower the ribbon on a brand new $110 million three-story medical advanced at Clearview Buying Middle.
November stated the system’s enlargement has helped maintain it by means of tough occasions like the current.
“This isn’t a results of the expansion,” he stated. “Our progress permits us to scale and adapt.”
Whereas the layoffs might be unfold throughout the amenities Ochsner owns and manages, they won’t have an effect on the hospitals which have affiliation agreements with Ochsner.
Learn Ochsner CEO Pete November’s letter to workers
These embody: St. Tammany Parish Hospital, Slidell Memorial Hospital, Terrebonne Normal Well being System and Christus Well being in Lake Charles.
Ochsner is giving laid off workers 60 days plus a severance package deal.
“We acknowledge this might be tough on folks impacted and other people right here and we are going to do the most effective we will to assist them,” November stated.