"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Monday, October 14, 2013

The Health Care Recession


This morning, there were a series of articles related to the thousand of jobs being eliminated within the health care field.  For decades, hospitals have been a very reliable source for employment; however of late, hospitals are now in a recession.  Wow!  Across the US, the economic picture is improving dramatically, but not in hospitals.  In reporting job loss for September, hospitals led all industries with over 8000 jobs lost; year to date, the number exceeds 40,000.  Large academic medical centers seem to be the hardest hit.  For example, UMMS took action across their system in August and September, Cleveland Clinic is now offering a buyout to over 3000 employees and Vanderbilt University Medical Center is eliminating 1000 positions.  Some are saying that the cuts are short term due to the expected expansion of coverage under the Affordable Care Act to 30 million Americans, but if there isn't any money to pay for those positions, they won't be returning.  At WMHS, we eliminated 88 positions last year as a cost savings measure and have made every effort to not fill those positions going forward.  We constantly assess every vacancy when it occurs and if we can work effectively without that position going forward, then we don't fill the position.  Every hospital across the US has to be focused on reducing their labor and supply costs, two areas that consume most every hospital's operating budget.  This is a very different time in health care as the changes are coming very fast and furious.  

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