Memorial Hermann cuts 350 from workforce in second layoff this year
Reasons cited include an uncertain healthcare environment, escalating costs, declining reimbursements and a softened local economy.
Memorial Hermann Health System in Texas is laying off about 350 individuals, amid the financial pressure of rising costs and declining reimbursement, according to the 110-year old Houston-based organization.
Coupled with healthcare uncertainty and a softened local economy, the health system made the decision to reduce its workforce.
"This is an unprecedented time in healthcare. The past year has ushered in a tremendous amount of change in the industry across the nation, and Houston is no exception," according to a statement from Memorial Hermann. "We continue to face an uncertain healthcare environment with escalating costs and declining reimbursements. In addition, we are impacted by a softened local economy. ogether, these reasons have driven Memorial Hermann to make proactive adjustments to position itself for continued success and financial sustainability."
[Also: Memorial Hermann ordered to pay $2.4 million over immigrant incident]
The layoff is part of an overall strategy to adapt to an uncertain healthcare environment by also reformatting its cost structure, being more cost-efficient and more consumer-focused.
"While decisions like this are never easy, these adjustments will ensure the organization is positioned to withstand the challenges we expect to face in the coming years," Memorial Hermann said.
The reduction represents less than 2 percent of more than 25,000 employees and does not impact direct patient care, according to Memorial Hermann.
It's the second time this year the Houston system has announced job cuts. Memorial Hermann Health System announced earlier this year that it would make 112 job cuts as part of a restructuring, according to the Houston Business Journal.
[Also: Memorial Hermann CEO Benjamin Chu resigns to pursue health policy work, system says]
The job cuts follow the June 19 announcement that CEO, Dr. Benjamin Chu would be stepping down. Chuck Stokes, executive vice president and COO, replaced him as interim president and CEO.
Other area healthcare systems have also laid off workers in 2017.
[Also: Brigham and Women's Hospital offers buyouts to 1600 employees, forecasts layoffs later on]
In May, Becker's Hospital Review reported 48 healthcare organizations had posted layoffs for 2017.
Twitter: @SusanJMorse
