Sunday, May 8, 2011

Hospital Layoffs and State of Denial Continue

Layoffs are continuing at U.S. hospitals as administrators are surprised by declines in patient numbers. Hospital layoffs in the first quarter were similar to the pace of the prior two years. You might think that the pace of layoffs would slow as demand for health care has been soft for more than five years, but administrators continue to plan for an increase in demand that shows no sign of materializing.

Layoffs are planned or underway this week at hospitals in Illinois, Maine, New Jersey, Massachusetts, and at least five counties in California.

Perversely, in 2008-2010, many hospitals needed layoffs because of the cost of unneeded expansions. There aren’t so many of those stories this year, as most expansion plans at hospitals have been scaled back or put on ice by now.