Memorial Hermann laying off 350 employees

HOUSTON – Memorial Hermann Hospital announced a second round of layoffs in less than a year Tuesday, with 350 employees
informed their jobs have been cut.

The hospital’s interim president, Chuck Stokes, said in a written statement the cuts “... represent less than 2 percent of our more than 25,000 employees and (do) not impact direct patient care.”

Memorial Hermann trimmed 112 jobs in January.

Stokes said the hospital is trying to adjust to the “new normal” in the health care industry.

"We continue to face an uncertain health care environment with escalating costs and declining reimbursements. In addition, we are impacted by a softened local economy," Stokes said.

Earlier this year, M.D. Anderson Cancer Center also cut 778 jobs, and St. Luke’s Hospital cut 810 jobs.

While health care remains one of Houston’s marquee industries along with energy, Professor Vivian Ho with Rice University’s Baker Institute says the health care providers are under pressure due to declining revenues, part of that caused by layoffs in the tepid oil and gas sector.

“There were a lot of people who had excellent insurance in oil and gas sector jobs. They lost those jobs and lost that insurance, so all the large institutions probably saw significant drops in demand.” Ho said.

Another factor is uncertainty about cuts in federal health care proposed by Congress.

“There’s no increase in insurance coverages coming, and in terms of what going in D.C., it's quite possible there could be a drop in coverage, which could also mean a drop in demand,” Ho said.

The job cuts are part of an attempt by care providers to increase cost efficiency in order to manage the uncertainty.

Memorial Hermann released the following statement:

“This is an unprecedented time in healthcare. The past year has ushered in a tremendous amount of change in the industry across the nation, and Houston is no exception.

"We continue to face an uncertain healthcare environment with escalating costs and declining reimbursements. In addition, we are impacted by a softened local economy. Together, these reasons have driven Memorial Hermann to make proactive adjustments to position itself for continued success and financial sustainability.

“It’s important to first note that this is a proactive response to ensure our future financial stability: we remain financially profitable with a strong balance sheet and have made significant progress through focused efforts around operational efficiency. 

“While decisions like this are never easy, these adjustments will ensure the organization is positioned to withstand the challenges we expect to face in the coming years. And none of these decisions and resulting actions will impact our promise to provide exceptional end-to-end patient experiences, anchored by superior quality, clinical excellence and affordable care. Memorial Hermann has been proudly serving the Houston community for 110 years. Our System is strong, we are financially sound, and we will continue to further our mission of advancing the health of all those whom we serve.”

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