Many health systems continue to grapple with financial headwinds, leading to significant restructuring of their leadership teams. From consolidations to layoffs, these changes reflect broader challenges facing the hospital industry as organizations aim to align their operating models with financial and operational realities.
Indianapolis-based Indiana University Health is overhauling its operating model, reducing six regions to four, and eliminating about 100 mostly nonclinical leadership roles. While about 100 positions are being cut, others are being created or restructured to better align with growth plans, including expansions in Fort Wayne, Fishers and Indianapolis, a spokesperson for IU Health told Becker's.
The updated operating model includes a growth and activation function to execute strategies regionally and revised structures to boost career mobility and address workforce shortages, according to the health system.
"We are adjusting our regional structure to strengthen our clinical care models and effectiveness, to improve talent pipelines and career pathways for team members, and to continue making investments in technology — all with the aim of advancing patient care," IU Health President and CEO Dennis Murphy said.
Springfield, Mass.-based Baystate Health recently eliminated 134 leadership positions as part of a larger transformation plan aimed at reversing $300 million in operating losses. The changes are part of a broader effort to save $225 million over two years and improve efficiency by reducing management layers. While some affected leaders will transition to new roles, Baystate is investing heavily in its workforce, renovations and community programs.
"We are significantly decreasing management spans and layers to improve efficiency, reduce costs without impacting bedside care, streamline decision-making and better enable our caregivers," Baystate said in a statement provided to Becker's.
The changes will enable Baystate to invest $1.2 billion back into the team, renovations, growth, care access and the community over the next six years. Baystate President and CEO Peter Banko also highlighted ongoing efforts to streamline revenue cycle operations and optimize resources, including real estate and external spend.
Mr. Banko assumed his role in June, and in September the system's chief information and digital officer, chief human resources officer and chief quality officers all exited. The leadership exits come after Baystate shared plans in February to delay annual pay increases for qualified workers due to financial challenges.
Valhalla, N.Y.-based Westchester Medical Center Health Network recently laid off about 130 management-level employees, representing less than 1% of its workforce. The cuts, focused on administrative roles, are part of a systemwide realignment to centralize operations and create a more efficient operating structure.
"WMCHealth Network is realigning its operations by centralizing services to better leverage the strengths of our entire Network and ensure the long-term health of our hospitals," the health system said in a statement. "As part of this realignment, we have made the difficult decision to consolidate and, therefore, reduce a number of administrative and corporate service roles across the system."
Samaritan Health Services, a five-hospital system headquartered in Corvallis, Ore., recently laid off 1% of its workforce and reduced executive pay to address financial losses.
Despite maintaining a small operating margin post-pandemic, rising inflation, cyberincidents and volume declines led to a $23 million revenue shortfall in July. The cuts highlight the growing need for hospital restructuring to ensure financial stability.
"The decision to eliminate positions within the organization was not taken lightly, but our current financial position is not sustainable," Samaritan said in a statement shared with Becker's. "To recover and maintain financial stability, several measures are being put in place including expense control, project delays and staffing adjustments."
In June, Providence, R.I.-based Lifespan, a five-hospital system, cut 20% of its executive positions, including the president of Newport Hospital, as part of its plan to save $6 million annually.
Lifespan President and CEO John Fernandez described the changes as part of a "one-system, one-team" strategy to reduce executive overhead and allocate resources more effectively to patient care. The restructuring comes amid Lifespan's rebranding as Brown University Health, signaling a closer affiliation with the university as part of its long-term growth strategy.
For hospital executives across the country, these cuts serve as a stark reminder that restructuring may be inevitable to maintain operational viability. As the healthcare landscape evolves, systems will continue to seek ways to reduce overhead, streamline decision-making, and focus on financial sustainability.