Health systems are increasingly trimming executive positions and pay to stabilize their financial footing amid rising operational costs, workforce shortages and inflationary pressures.
Springfield, Mass.-based Baystate Health will see three top leaders depart, effective Oct. 23, including Chief Quality Officer Doug Salvador, MD, Chief Information and Digital Officer Kevin Conway and Chief Human Resources Officer Kristin Morales-Lemieux.
Earlier this year, Baystate delayed annual pay increases for qualified workers due to financial issues, including expense growth outpacing revenues, staff shortages and reimbursements from payers not covering the cost of care.
Over the next week, President and CEO Peter Banko and other executive leaders will discuss the establishment of "a new operating model, system organizational structure and streamlined decision-making processes," a spokesperson for the health system told Becker's.
Similarly, Providence, R.I.-based Lifespan has cut 20% of its executive roles as part of a broader restructuring effort aimed at reducing overhead costs and directing more resources to patient care. The restructuring has led to the departure of key figures, including Crista Durand, who served as president of Newport (R.I.) Hospital since 2014.
The decision comes ahead of the system's rebranding as Brown University Health later this year and the planned acquisition of two hospitals: Taunton, Mass.-based Morton Hospital and Fall River, Mass.-based St. Anne's Hospital.
Lifespan told Becker's the cost-cutting measures are expected to save $6 million in fiscal 2025.
Leadership changes aren't the only cost-saving measures health systems are employing.
Corvallis, Ore.-based Samaritan Health Services recently laid off 1% of its workforce and temporarily reduced executive pay to counteract financial losses.
The five-hospital system managed to maintain a small operating margin since the pandemic, but challenges including rising inflation, cyberincidents and volume declines in some clinical areas have hurt its ability to maintain a positive margin. In July, operational expenses exceeded revenues by almost $23 million.
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.