The largest public health system in the U.S., NYC Health + Hospitals, announced on June 2 it will lay off 396 managers and eliminate 80 currently unfilled positions as it attempts to close a projected $1.1 billion budget gap in 2018.
The cutbacks will reduce the system’s six layers of managers to four and is expected to save $60 million in 2018.
“By restructuring and reducing unnecessary layers of management, we can better direct resources where we need them most—at the front line of patient care,” interim president and CEO Stanley Brezenoff said in a statement. “There will be no impact on services or patient care, quality, or safety. Finding efficiencies is a smart, responsible business practice, and the only way we can sustain our health system that serves the most vulnerable New Yorkers.”
The layoffs come after NYC Health + Hospitals reported a $673 million operating loss through the third quarter of fiscal year 2017. Operating revenues had increased 1.8 percent in the 11-hospital system, but were offset by a 6.4 percent rise in operating expenses and a 9 percent drop in net patient service revenue, which it blamed on lower disproportionate share hospital payments from CMS.
The system still expects to be able to shrink its budget gap as part of a five-year transition plan, which had led to the departure of president and CEO Ram Raju, MD, in November 2016. In the short term, however, more layoffs are expected, as the state’s comptroller reported the system would reduce staffing by 926 full-time equivalent positions by the end of the current fiscal year.