What’s The News?Healthcare industry in the US is right now under pressure - both from the investors and the patients. Losses are mounting, and healthcare employees are being terminated left and right. Click To Tweet
Ever since 2019 started, more than 700 employees belonging to various hospitals and healthcare organizations have been fired.
Organizational restructuring and improving revenues have been attributed as the main causes.
But, is that the reality?
What Does This Mean?
The five recent and biggest layoffs which stunned American in 2019 are:
- $4.3 billion worth Cerner, which provides healthcare management services and software, has announced that they will fire 129 employees. This job has resulted due to their contract with Augusta University Health in Georgia has ended. Cerner has 29,000 employees, and days before this job cut, some employees were offered a voluntary retirement offer as well.
- Kaiser Permanente, which reported $72 billion revenues in 2017, and is considered one of the largest players of managed healthcare services in the US will terminate 200 employees. All of these employees belong to the Colorado facility. Earlier, Kaiser Permanente had admitted that they suffered $65 million worth of losses in the last three years. 200 employees were fired from the same Colorado facility in the month of November as well. Around 8000 employees work for the company in Colorado, and overall, they have more than 2 lakh employees, across the world.
- Dallas based Children’s Health, which is America’s one of the renowned pediatric health care system will terminate close to 100 employees. Children’s Health plans to shut down the home care division in Dallas, thus, all 93 employees there will be asked to leave.
- Vermont based Springfield Medical Care Systems has decided to fire 27 employees. These job cuts are part of their aim to save $6.5 million, over the next 12 months. Besides, the healthcare provider will also cut salaries: 10% for the full-time employees, and 4% for the hourly waged employees.
- Genesis Health System, which is based out of Davenport, Iowa, will terminate 196 jobs, as informed to U.S. Department of Labor and the Iowa Govt. However, all these fired employees will keep their jobs, as this was necessary for a company restructuring exercise.
Why Does This Matter?
The Big Picture: These layoffs across the USA signifies a major trend for the healthcare industry, and it is not good.
While Kaiser Permanente has admitted that they have suffered losses to the tune of $65 million in the last two years, other healthcare providers who have terminated jobs are silent on the exact reasons.
And this is not a one-off case.
Dallas-based Tenet Healthcare reported a loss of $9 million in Q3 of 2018-19, even as revenues were down 2.7%. CHS, a Fortune 500 company reported $325 million loss in Q3 of 2018-19, as revenues fell by 6%.
At the same time, patients are also not happy: In a recent survey by Reuters, it was found that 65% of Americans are concerned about rising healthcare costs, and 30% of the respondents admitted that they are not sure about which healthcare company to choose from.
Are we witnessing a major disruption in the US healthcare sector?