MD Anderson Cancer Center Announces Staff Reductions

Updated 11:23 a.m.: Officials with MD Anderson Hospital outlined a staff reduction plan that will impact between 800 and 900 employees and save $120 million a year.

Officials said that the layoffs will not affect doctors, nurses or practitioners, but employees who are in management positions

"I can assure you, during the last several months and more recently during the decision-making process, great effort and compassion have gone into exploring all options to make sustainable changes and to avoid
impacting our treasured colleagues," MD Anderson President Ronald DePinho said during a new conference Thursday. "Great improvements have been made through this committed effort, but more must be done for our overall strategy to align expenses with revenues."

The layoffs, which will impact about 5 percent of the 20,000 strong workforce, began Thursday morning in earnest and are expected to continue through next week.

DePinho said changes in recent years to the healthcare system meant that MD Anderson also had to change in an effort to continually improve patient care, while reducing the costs associated with quality care delivery.

"When it comes to our patients, they remain our number one priority," he said. "I can assure that the health and safety of our patients will not be impacted by these changes. This is a very sombering day for all of us. We care for our patients, but we also care for each other."

Many of the affected workforce fill non-medical roles within the hospital, such as administration or other support roles that don't have direct patient contact.

Dan Fontaine, MD Anderson's executive vice president for administration, said about 12 percent of those affected hold managerial titles or leadership roles.

"We took what you would consider to be a diagonal approach to the organizational structures, so there will be folks that are affected that are at executive management levels," he said. "A lot of the positions will be in the finance and administration areas...We tried to focus on areas, that we would be more efficient but would not affect patient experience, and that has been where the emphasis has been."

Since last month, MD Anderson has been rumored to be facing financial difficulties as a result of changing healthcare needs, the implementation of an electronic health records system, changes in government regulations and the overhaul of the revenue cycling system at the hospital.

For the first quarter of the 2017 Fiscal Year, MD Anderson recorded operating losses of $102.4
million in September and October; for October, the losses totaled $60.9 million, compared to a surplus of $11.5 million in the same period in 2015.

"When you took all of those things into effect, one of the things we did...was to make sure that...we would have folks there so that whatever difficulties we had, didn't pass through to affect the patient experience," Fontaine said. "I think we were very successful in that regard. If we are going to put ourselves in a position of having financial security to be here for patients for years to come, we've got to take some steps now."

Original Story: HOUSTON, TX — One of the largest employers in the Houston area has announced plans to trim its workforce.

Officials at the MD Anderson Cancer Center, located in downtown Houston, released a statement Thursday indicating the reduction would not negatively affect patient care at the hospital and that the institution remains financially strong.

The news release didn’t provide specific details of the layoff plan, or which areas would be most affected.

The hospital's president, executive vice president and CFO were expected to address those issues later today.

Image: Shutterstock