NYC Health and Hospitals Corp., to cut workforce by 10 percent by FY 2014

Tools

New York City Health and Hospitals Corp., (HHC) plans to use layoffs and attrition to reduce its workforce by 3,700 (almost 10 percent) by fiscal year (FY) 2014 as part of a four-year restructuring and cost containment plan designed to gain HHC an additional $300 million in annual savings when implemented fully. This newest round of cost-cutting follows on the heels of a two-year cost containment plan that saved HHC some $300 million. The cuts are necessary to address a $1.2 billion budget shortfall "that results from reduced state and federal Medicaid funding, a dramatic rise in the number of uninsured patients and sharply rising pension and healthcare costs," HHC President Alan Aviles tells the Brooklyn Eagle.

In early 2009, the largest public hospital system in the United States had more than 38,700 employees. HHC has cut about 1,300 positions in FY 2010 (ending June 30) and expects to reduce its employees by 1,000 positions during FY 2011, 600 during FY 2012, 500 during FY 2013, and 300 during FY 2014. The employees most impacted by the workforce reductions will be administrative managers and blue-collar trades employees, says Aviles, according to the Wall Street Journal.

HHC also will reduce its physician affiliation agreements by about 6 percent ($51 million). Those contracts will cost the system $857 million in FY 2011. HHC will keep its 11 acute-care hospitals open, but plans to close six clinics: five in Brooklyn and one in Queens.

Most HHC employees are union members. That can create headaches when implementing layoffs--as Jackson Health System in Miami can attest. The Service Employees International Union has filed an emergency lawsuit seeking a temporary injunction to prevent the troubled health system from firing more than 170 nurses, doctors and other healthcare staff based on patient safety issues, reports the Miami Herald.

To learn more:
- read this Wall Street Journal article
- read this Brooklyn Eagle article
- read this New York Post article
- read this HHC press release
- read the HHC president's remarks
- review HHC's restructuring plan
- read these Miami Herald articles: article 1 or article 2

Related Articles:
Florida hospital continues downward spiral, will cut 900 jobs
Hospital CEOs: Reform savings goals doable with lean, Six Sigma, Toyota methods
New York City Council Fiscal Year 2011 Preliminary Budget Hearing Committee on Health