Cleveland-based MetroHealth System is pausing job searches for administrative positions and prioritizing "unnecessary expense" reductions as part of cost-cutting measures, the health system's interim CEO said in an Aug. 5 email to staff, which was obtained by cleveland.com.
The health system's financial performance "is not where we expected or need it to be," despite positive trends, Christine Alexander-Rager, MD, chief medical officer and interim president and CEO, wrote in a weekly newsletter to staff. A spokesperson confirmed to the news outlet that the plan does not entail layoffs.
The measures include reducing all travel expenses, as well as "unnecessary expenses, including purchased and contracted services." MetroHealth is also prioritizing the hiring of patient-facing roles with strong growth opportunities, and pausing job searches for administrative positions "that are not in the final stages," according to the report.
"Let me be clear: These are course corrections, not major changes in direction," Dr. Alexander-Rager wrote. "We just need to tighten our belts while we grow revenues and increase access by working smarter," adding the system remains in a strong place financially compared to other safety-net hospitals. Dr. Alexander-Rager is the acting CEO while Airica Steed, EdD, RN, is on medical leave. Dr. Steed took the helm in 2022.
MetroHealth saw total revenue grow from $1.6 billion in 2022 to $1.8 billion in 2023, though it reported a $19.7 million operating loss in 2023. The cost-cutting measures come after a year of significant expenses increases; the system's labor costs grew to $1 billion in 2023, up from $948 million in 2022. Spending on supplies also rose to $354 million, up $70 million from 2022.
The cost-cutting plan was formulated by senior executives prior to Dr. Steed's leave, a MetroHealth spokesperson told Becker's. Last year, the health system was in a similar finanicial position and took a "series of course corrections that enabled us to hit our targets," the health system said.