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Cleveland Clinic plans layoffs, budget cuts

Wednesday, September 18, 2013 at 3:47 PM

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The Cleveland Clinic

The Cleveland Clinic told employees this morning that it will reduce its workforce in 2014 to meet the growing demands of a consumer-driven health care market. ideastream health reporter Sarah Jane Tribble reports that will eventually include layoffs.

Cleveland Clinic employees learned last week that the region’s largest health care system wants to cut $330 million from its budget next year.  And Clinic spokesperson Eileen Sheil says the news should come as no surprise. 

“Hospital systems have to become much more efficient to make health care affordable to patients in the future,” Sheil says.

The Clinic has been steadily hiring the past three years, adding 3,000 jobs since December 2010. Now, it plans to offer 3,000 employees early retirement. Those workers will be sent a package in late October.  Once it’s known how many accept the offer - and how many positions can be left unfilled - Clinic leaders will then determine what layoffs are necessary.

Sheil says layoffs will be announced during the first weeks of the New Year.  Both patient care and support services jobs could be affected.

The Clinic is one of Ohio’s largest employees, with 44,000 workers. It also provides millions in grants and donations to the Northeast Ohio community annually.

The budget cuts are to prepare for a changing health care environment, Sheil said. That includes a future in which “te burden of costs is going to be on the patient so we need to be affordable to patients in the future,” she sayd.

And there are new pressures on the health system: The Clinic’s Northeast Ohio market share fell 5 percent in 2012. In addition, federal grant funding is down. And while revenue was up 7 percent to more than $6 billion last year, the system’s total income decreased slightly.

As a result, Sheil says, the Clinic has been trying to raise awareness among employees of the actual costs of healthcare.

“So, we’ve posted prices in the operating room of supplies so when doctors open packets of supplies, they know what it costs. And so it raised their awareness level about whether or not they really need it. And it’s been quite successful but, you know, health care over the years has become such an enormous amount of the GDP and we’re looking at how do we take costs out of healthcare to make sure it’s affordable,” she says.

The system’s efforts to reduce costs will continue even after the layoff announcement in January, she says.

Additional Information

To read the latest “State of the Clinic” report produced by the health care company, go here

When was the last time the Clinic laid off?
The Clinic last announced layoffs in November 2010 - just before starting a steady round of hiring. The 2010 layoffs included 200 employees and were reported by The Plain Dealer here

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