The workers who are being laid off are not unionized, the hospital told state officials in a legally required notice, which listed dozens of different kinds of employees hit by the layoffs. The reductions represent less than 1% of the workforce across Cedars-Sinai facilities and are primarily affecting “nonpatient care positions,” a Cedars-Sinai spokesperson said.
In a statement, the hospital faulted a growing gap between its revenues and expenses, “the result of underpayments from government insurance programs and the rising costs of caring for patients, among other factors.”
“We appreciate that these changes are difficult and painful, and we have taken every step possible to avoid them,” Cedars-Sinai said in its statement.
The layoffs will affect 131 employees at Cedars-Sinai Medical Center, a slight reduction from the numbers the hospital originally reported to the state, according to its spokesperson. Cedars-Sinai has also cut roughly two dozen employees at other Cedars-Sinai-related entities.
The Cedars-Sinai layoffs come as industry groups have been raising alarms about the financial footing of California hospitals amid rising costs for labor and supplies. Hospital systems across the country have been announcing layoffs this year, citing the pressure of growing expenses.
In the San Joaquin Valley, Madera Community Hospital closed this winter; in Los Angeles County, Beverly Hospital in Montebello recently filed for bankruptcy protection, saying it was trying to avoid the same fate, and had previously announced that it would no longer provide labor and delivery care in its maternity department or admit children for inpatient care.
However, the cuts at Cedars-Sinai are much more modest in scope for a major employer, “not a signal of a hospital in trouble,” said Glenn Melnick, a USC professor focused on health finance. Melnick said that as hospitals anticipate continued increases in labor costs and grapple with losses in the stock market, “prudent places are adjusting in advance.”
Rand Corp. economist Christopher Whaley characterized the Cedars-Sinai cuts as “a normal fluctuation, rather than something that I think is indicative of bigger concerns” with its finances.
California lawmakers decided this week to offer a lifeline to the hardest-hit hospitals to prevent them from closing, voting to loan $150 million to financially distressed nonprofit and public hospitals. The California Hospital Assn. has been pushing for a much bigger infusion of $1.5 billion in the upcoming state budget, but lawmakers are also facing a projected $22.5 billion budget deficit.