Naperville, Ill.-based Edward-Elmhurst Health revealed plans to cut approximately 234 jobs throughout the health system through a mix of layoffs and abstaining to fill vacant positions, according to Crain's Chicago Business.
Edward-Elmhurst CEO Mary L. Mastro wrote in an Oct. 4 memo to employees, obtained by Crain's Chicago Business, the cuts were related to declining reimbursement and lower operating income in fiscal year 2017.
"While our volumes remain strong, we are paid less for every patient we see. Our expenses are growing faster than reimbursement from Medicare, Medicaid and commercial insurance companies, and our operating income in fiscal year 2017 was the lowest since our [2013] merger," Ms. Mastro wrote in the memo. "Fundamental changes to our cost structure are necessary to ensure our bottom line improves."
The job cuts include 84 layoffs and 150 positions which officials will not fill. A spokesperson from the health system told Becker's Hospital Review via email Oct. 4 affected employees will receive severance packages and comprehensive outplacement services. The health system also plans to reduce nonlabor costs, including savings on vendor contracts and purchases of supplies and drugs, the spokesperson wrote.
"This was a difficult decision, but necessary to ensure the long-term future of the system. … Despite the challenges we and the healthcare industry are dealing with, Edward-Elmhurst is financially strong. The moves we've made will allow us to provide and grow the quality services our patients have come to expect," the spokesperson told Becker's.
In August, the health system revealed plans to institute $50 million in cuts accounting for approximately 4 percent of the system's total expenses. Edward-Elmhurst finished fiscal year 2016 with $1.2 billion in total revenue, according to the report.