Cleveland Clinic aims to cut $330 million next year

Cleveland Clinic has an ambitious plan for 2014--cut its budget by $330 million, a scenario that will likely lead to layoffs, the Cleveland Plain Dealer reported.

Altogether, the nonprofit multispecialty academic center will offer voluntary retirements to about 3,000 employees in October, 7 percent of its total workforce of 44,000, according to the Plain Dealer. Altogether, the hospital system expects to reduce its administrative budget by about 6 percent and its clinical budget by about 4 percent.

"This has become the new normal. This has been a conversation that's been ongoing, not just at the Cleveland Clinic but nationally," Chief Executive Officer Toby Cosgrove told the Plain Dealer.

Budget cuts, buyouts and layoffs are all part of the current business prerogatives among hospitals, California Healthline reported. Organizations cite potential contributors as ongoing financial pressures from the implementation of the Affordable Care Act and the lack of additional Medicaid revenue in states that don't participate in the ACA, Altogether, hospitals and healthcare systems cut 9,000 jobs in May, the sector's biggest monthly drop in a decade, according to California HealthLine.

But whether the ACA is actually to blame is unclear. California HealthLine noted that several hospitals and hospital systems use the ACA as a potential cover, and politicians opposed to the healthcare reform legislation use it to link to what are routine healthcare job losses.

To learn more:
- read the Cleveland Plain Dealer article
- read the California HealthLine article

Related Articles:
NC hospital plans to close, blames lack of Medicaid expansion
Interfaith Medical Center plans to shut its doors for good
Layoffs, budget cuts hamper Medicare anti-fraud efforts
While hospitals cut jobs, CEO pay continues to rise
Hospital systems cutting jobs
Hospitals remind Congress they boost economy, jobs

Suggested Articles

The Centers for Medicare & Medicaid Services released the MA plan star ratings for the 2020 plan year on Friday.

A New Orleans-based genetic testing company will pay $42.6 million to resolve False Claims Act and kickback allegations.

FierceHealthcare caught up with former ONC and Veterans Affairs' official Genevieve Morris for our latest Executive Spotlight.