Is Obamacare to Blame for Hospital Layoffs?

Cleveland Clinic officials announced this week that they would be offering 3,000 buyouts in an effort to cuts costs, citing financial pressures from health care reform as one of the reasons for their decision. More than a dozen hospitals across the country are taking similar measures, due in part to health care reform requirements, but also because of the $9.9 billion in government sequester cuts to Medicare, hospital debt and states’ refusal to expand Medicaid, the government’s health insurance program for the poor.

“For hospitals in general this is kind of the new normal,” says Eileen Sheil, executive director of corporate communications for the Cleveland Clinic. According to most recent estimates from the Bureau of Labor Statistics, the hospital sector lost about 4,400 jobs in July. In May, hospitals shed 9,000 jobs, the worst month for the industry in a decade.

Ron Stiver, senior vice president of engagement and public affairs for Indiana University Health, which plans to cut 800 employees, says the assertion that health care reform is the reason behind hospital cuts is “overly simplified.” IU Health is making cuts partially because of the health law, he says, but also because the state has not expanded Medicaid, the hospital system has fewer inpatient volumes, and payment rates for its services have been declining.

Vanderbilt University Medical Center in Nashville, Tenn., plans to cut 1,000 positions, citing an aging population, lower reimbursement rates, a reduction in National Institutes of Health grant funding and a lack of Medicaid expansion in Tennessee.

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