The healthcare system in the United States is facing significant difficulties due to inflation, rising costs of living, and the ongoing COVID-19 pandemic. Despite increased hospital admissions, medical personnel and hospital staff find themselves working long hours for low wages, and their job security is not guaranteed. Ochsner Health, one of the largest healthcare providers in Louisiana and Mississippi, recently announced layoffs affecting 770 employees, which accounts for approximately 2 percent of its workforce.
In a mass email sent by Ochsner Health CEO Peter November on May 11, he stated, “For some time, we have all been working hard to address our financial and workforce challenges. We are not alone in this: healthcare providers across the country have experienced increased labor costs, a shortage of patient care clinicians, high inflation, and the end of pandemic relief funding from the government.” November clarified that the impacted positions were primarily management and non-direct patient care roles.
The timing of the layoffs, during Nurses Week with the theme “Nurses Make a Difference: Anytime, Anywhere—Always,” has caused additional distress. The exact number of nurses affected by the layoffs remains unclear.
While the email did not provide specific reasons for the layoffs, it mentioned the need to reduce expenses and ensure the organization’s ability to fulfill its mission and serve the patients and communities effectively. The layoffs are projected to save the hospital system between $125 million and $150 million per year.
Ochsner Health operates numerous hospitals, health centers, and urgent care facilities across Louisiana, Mississippi, Alabama, and the Gulf South region. The organization reported a loss of $96 million in 2022, with expenses surpassing revenue by 1.5 percent. From 2019 to 2022, the health system experienced a 10 percent increase in the cost of medical supplies, equipment, and drugs, as well as a 9 percent rise in labor costs, including an eightfold increase in labor costs for travel nurses. Prior to the layoffs, Ochsner had nearly 800 unfilled nursing positions. Medicaid reimbursements rose by only 1 percent on average since 2014, while Medicare rates increased by 2 percent.
Ochsner’s revenue in 2020 reached $4.21 billion, compared to $3.74 billion in 2019. Executive compensation also increased to $27 million in 2020, a $4 million rise from the previous year. Due to delays in processing nonprofit filings, revenue earnings for 2021 and 2022 are not readily available. Compensation for Ochsner executives ranges from $1 million to $2 million.
Recent departures of several hospital systems from the Mississippi Hospital Association (MHA) have raised questions. While the reasons behind the exodus are unclear, they seem to have political implications, coinciding with a $250,000 donation from an MHA-associated Political Action Committee (PAC) to Democratic gubernatorial candidate Brandon Presley. Notable healthcare providers such as University of Mississippi Medical Center, Forrest General Hospital, George Health System, Memorial Health System, Merit Health, North Mississippi Health Services, Ochsner Health Services, and Singing River Health System have all left the MHA.
Presley, in a press release on May 17, attributed the hospital closures and healthcare crisis in Mississippi to Governor Tate Reeves’ opposition to Medicaid expansion. He promised to fight for Medicaid expansion if elected governor, emphasizing its potential to keep rural hospitals open, provide healthcare to thousands of working Mississippians, and create job opportunities.
The challenges faced by Ochsner Health and the broader healthcare system highlight the limitations of capitalism in meeting the social needs of the population. The recent debt ceiling agreement reached by President Joe Biden and Republican House Speaker Kevin McCarthy,