Health

Leading Cancer Center Lays Off 1,000

Escalating costs, electronic records system, reduction in reimbursements all behind MD Anderson's decision

The reasons given for laying off nearly 1,000 people at one of the nation’s leading cancer centers on Thursday are these: Escalating health care costs, the implementation of an electronic health record system, reductions in the reimbursement of care — and expanding health care needs due to the aging of Americans.

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The layoffs at MD Anderson Cancer Center in Houston, Texas, exclude doctors and clinical-care nurses. Some of the jobs will be lost through natural attrition and retirement, while the remaining 800 to 900 job cuts will affect support staff behind the scenes. Research labs may also be affected.

Patients, however, are being told not to worry and to expect the same quality of care they’ve always had at the international powerhouse for cancer treatment, care and research.

Dr. Ramin Oskoui, a cardiologist in the Washington, D.C., area, told LifeZette, “This is about more than the ACA. Insurance companies are lowering and delaying reimbursement, as is Medicare. Cancer care isn’t going to be the cash cow hospital systems think it will be.” Oskoui is also CEO of Foxhall Cardiology PC and a regular contributor to LifeZette.

The job cuts are expected to save about $120 million, according to the Houston Chronicle. The paper reported that the reduction, nearly 5 percent of Anderson’s 20,000-employee work force, “had been feared at the acclaimed cancer center since late last month when officials confirmed operating losses of more than $50 million in both September and October.”

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The president of MD Anderson, Dr. Ron DePinho, made the announcement in a video to employees Thursday morning. “Despite great effort from our entire MD Anderson community, it has become clear that we must act now to protect our ability to continue investing in our mission to end cancer,” he stated.

DePinho cited the implementation of an electronic health record (EHR) system in 2016 as a key factor in the losses. Many health care systems cite the mandated upgrading to EHR along with the time it takes to implement the system and train employees as a source of major losses. Time away from patients is a byproduct.

However, upper management, including DePinho, have been criticized for their salaries which are often in excess of $1 million a year. DePinho makes more than $2 million, the Chronicle reported. He also received a $208,000 annual performance bonus this year, which he said he’s donating back to the hospital.

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Because of one of the most robust philanthropy programs in the nation along with generous state funding, MD Anderson is in the black, DePinho stated. But the hospital wants to keep it that way and maintains the layoffs were unavoidable.

“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,” DePinho said. “Great improvements have been made through this committed effort, but more must be done in our overall strategy to align expenses to revenues.”

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He added, “The reality is health care has changed, and so must we. Like other major health care institutions nationwide, we are focused on improving patient care while reducing costs of care delivery.”

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