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September 22, 2022

Yale New Haven Health trims headcount as losses mount

PHOTO | Contributed Vincent Petrini
By Liese Klein

Yale New Haven Health (YNHH) announced Thursday it had cut 155 jobs due to mounting losses relating to the COVID-19 pandemic.

Of the 155 jobs cut, 72 resulted in layoffs and 83 vacant jobs were eliminated, Senior Vice President Vin Petrini said Thursday. 

“Given the financial challenges that the health system has faced this year and going into next year, we made the very difficult decision to eliminate 155 management level positions yesterday,” Petrini said.

All of the jobs eliminated were administrative and in departments like finance and information technology, with no cuts to patient-facing roles, Petrini said. Those laid off were encouraged to apply for other positions – YNHH has 3,600 jobs open at present, mostly in patient-care roles.

In total, 28 people were laid off at the health system level, 23 people at Yale New Haven Hospital, 11 at Bridgeport Hospital, three at Greenwich Hospital, four at Lawrence + Memorial Hospital in New London and three at Northeast Medical Group, the system’s practice network.

The seven-hospital system, which includes Westerly Hospital in Rhode Island, employs about 26,000 people. 

Ballooning losses due the pandemic were the cause of the cost-cutting, Petrini said. YNHH expects to lose at least $250 million in the current fiscal year even with the job cuts, Petrini said. 

Factors like inflation, lagging surgical volumes, supply chain issues and pandemic-related costs like traveling nurses have increased costs. Due to ongoing labor shortages, the system is currently employing about 800 traveling nurses at premium rates, compared to pre-pandemic levels of 100-200, according to Petrini.

In addition, pandemic-caused delays in seeking medical treatment have added to case complexity and extended patients’ length of stay, cutting into profit margins. Ambulatory surgery volumes have increased 8% this fiscal year, to nearly pre-pandemic levels, Petrini said, but financial challenges remain.  

“Unfortunately, this is the difficult residue of the pandemic that’s impacting hospitals,” Petrini said. 

YNHH CEO Chris O’Connor, who took the top job at the system earlier this year after the retirement of longtime CEO Marna Borgstrom, said that cost-cutting was one of his top priorities. 

“Overall, we’re going to have to find our path to financial stability. That’s going to mean making some expense reductions, but also, how do we grow our services back to the levels where they were pre-pandemic?” O’Connor said in an April interview with New Haven Biz.

Part of that growth is continued expansion of YNHH’s neuroscience services, including the construction of the new $838 million center at the system’s Saint Raphael’s campus in New Haven. Major philanthropic gifts have allowed the system to fund new initiatives like the center, Petrini said.

“That's going to be an important component of  our plan over the next several years – continue to invest and continue to grow,” Petrini added.

New Haven Economic Development Administrator Michael Piscitelli said the city did not anticipate major negative impact from the layoffs at YNHH, the city’s second-largest employer after Yale University.

“They are an anchor in our community,” Piscitelli said. “And although extremely difficult for the people who are being displaced, it's very important that we hit these challenges head on, so that we can continue a forward growth momentum.”

YNHH is not the only academic medical system reporting major losses this year: Boston’s Mass General Brigham reported a net loss of $949 million in the third quarter and Ascension Health, a St. Louis-based system with 144 hospitals, reported a net loss of $1.8 billion for the 12 months that ended June 30.

The first half of 2022 has been especially difficult for hospitals nationwide, the American Hospital Association (AHA) said in a special bulletin on Sept. 15. 

“Even the most optimistic projections for the entirety of 2022 indicate margins will be down 37% compared to pre-pandemic levels, with more than half of hospitals operating in the red,” the hospital group said. In a worst-case scenario, margins could be down as much as 133% compared to pre-pandemic levels, with over two-thirds of the nation’s hospitals operating in the red. 

AHA President and CEO Rick Pollack said, “While federal support and relief has tapered off, the fight against COVID hasn’t. These realities translate into access to services being put in jeopardy. This deserves the immediate attention of policymakers at every level of government to ensure we are able to keep people healthy and maintain essential public services that our communities depend on.”

Contact Liese Klein at lklein@newhavenbiz.com.

 

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