University Hospitals to cut more than 300 jobs; patient care not affected

CLEVELAND, Ohio — University Hospitals will eliminate more than 300 leadership positions as the health system continues taking steps to fix two years of budget shortfalls and cope with rising costs, the health system announced Wednesday.

Most of the positions are non-clinical, and patient care will not be affected, UH said in a news release. The cuts, which include some support services workers, represent more than 10% of UH’s leadership.

The elimination of 300 jobs is one of several moves that UH has made in the last few years to meet its financial challenges. A labor shortage, record inflation and Medicare reimbursement rates that are not keeping pace with rising costs have contributed to its financial challenges, UH said.

More than 60% of UH’s patients use government health insurance such as Medicaid or Medicare, with the majority on Medicare, the health system said.

UH has seen double-digit increases, due to inflation, in labor, medical supplies and services such as consultants or groundskeeping, said UH chief operating officer Dr. Paul Hinchey.

The job cuts come after more than 300 UH nurses in the Enterprise Staffing Services department had pay cuts this month as part of post-pandemic staffing adjustments.

The hospital system posted operating losses of $256 million in 2023 and $302 million in 2022.

In 2022, UH closed its Bedford and Richmond hospitals, and closed its labor and delivery department at UH Portage.

Currently, UH has seen its revenue increase nearly 9% year over year, due to increased access for patients and implementation of a new electronic health records system, UH said. However, the revenue growth has been offset by rising costs, UH said.

“These decisions are never easy,” UH CEO Dr. Cliff A. Megerian said about the latest job cuts in a statement. “The important thing is that we make these strategic moves now so we can continue to serve our community and fulfill our mission for decades to come.”

All employees facing job loss will be notified by Thursday, and will leave UH by Aug. 1, Hinchey said.

Some of those being cut are C-suite executives, vice presidents and directors, Hinchey said. Names of leaders who are leaving UH will not be announced, he said.

“We’re redesigning our organizational structure so that we can continue to do all the same activities, but at a lower cost,” Hinchey said. “Then we can take those dollars and reinvest them in our frontline caregivers and in our patient care efforts so that we can continue to care for Northeast Ohio.”

Employees affected by the reduction will receive a severance package, UH said. The health system has about 33,000 employees.

In addition to reevaluating its leadership positions, UH’s other priorities include improving patient access, enhancing patient experience and keeping healthcare costs low, UH said.

UH’s new electronic medical record software and other new technology helps UH reduce other support functions, such as IT or billing, so that it no longer needs as many people to do the same thing, Hinchey said.

The health system doesn’t anticipate cutting more employee positions, or closing more hospitals, in the foreseeable future, Hinchey said.

Julie Washington covers healthcare for cleveland.com. Read previous stories at this link.