Jobs up, jobs down—a sign of these healthcare times

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 - Dave Pearson
Dave Pearson

It’s a duo of developments that are completely unrelated yet similarly themed and coincidentally timed. Within the space of hours, one prestigious U.S. hospital system gives word of layoffs and another announces wage increases.

In Massachusetts on May 20, Lahey Health let go of 130 people at three hospitals (while also cutting pay for top executives). The institution pointed to a $21 million loss over two quarters due largely to low reimbursements and over-budget EHR implementation expenses. The CEO of its flagship campus, long known as the Lahey Clinic, told the Boston Business Journal that the historic snowfalls of this past winter also played a part. Each storm cost Lahey a couple million dollars, with big tabs running up on not only snow removal but also cancelled outpatient appointments.

Just two days later, from its home base in Missouri, Ascension Health unveiled plans to lift its minimum wage to $11 an hour across the 17 states in which it operates. The Catholic system was already paying workers in that tier more than the federal hourly minimum of $7.25 as part of what it calls its Socially Just Wage program. Some 10,500 employees, seven percent of Ascension’s 150,000-person workforce, will benefit by the raise.

The system’s magnanimous gesture may have flowed, in part at least, from a business boomlet. Earlier in May the St. Louis Business Journal reported that Ascension Health’s revenues were up two percent overall and five percent in patient services. At that time Ascension, parent company of Ascension Health, attributed the market success to steady increases in outpatient surgical, behavioral health, home health and urgent care. It also reported a bounce in inpatient revenues on the wings of Medicaid expansion and Obamacare.

The coincidental juxtaposition of two major provider-employers, walloped Lahey and fortunate Ascension, probably points to nothing more than what American Society of Clinical Oncology clinical chair Robin Zon, MD, called the “profound transition” of the American healthcare system. The context of her comments was ASCO’s May 21 proposal for a new payment model, one that would have ramifications for radiology.

Then again, it probably also points to nothing less—as reflected by, for example, major private insurers seeking to drastically raise premiums and a new online tool to match healthcare providers with short-term doctors, nurses and other healthcare workers.

May was an interesting month for those whose business is in healthcare and for those whose business is healthcare. Expect the summer months to be just like it, only more so.