The MetroHealth System will lay off 125 workers as the public hospital system braces for another year of financial losses.
The cuts will largely hit administrative jobs “ranging from senior leaders to entry-level hires” but not patient care, the system said in a news release Thursday. Employees have been offered severance pay. The layoffs make up less than 1.5% of the hospital’s workforce.
MetroHealth said it is also suspending bonuses for 200 “top leaders” for the remainder of the year.
The hospital system is trying to “stabilize its finances” as spending on charity care for uninsured patients has soared to more than $1 million a day, according to the release.
“We made these decisions in response to significant financial challenges facing our System,” CEO Dr. Christine Alexander-Rager wrote in an email to employees. “Despite your hard work and steady growth in our volumes, MetroHealth’s expenses continue to outpace revenues. And that gap is growing.”
By the end of May, MetroHealth was $20 million short of its expected earnings for that point in the year, according to a presentation that was included on the hospital’s website with materials for a special board of trustees meeting Wednesday afternoon.
MetroHealth, which has a $2 billion budget, ended 2024 with operating losses of $50 million, according to the hospital. The system receives almost $32.5 million from Cuyahoga County taxpayers through a health and human services property tax levy.
Alexander-Rager wrote that she saw “more red flags” in MetroHealth’s financial future, including changes in Medicaid eligibility. New federal work requirements could apply to as many as 35,000 Cuyahoga County residents enrolled in the government-funded health insurance.
MetroHealth trustees met in a private session for more than an hour on Wednesday. When they returned to public session, the board chair, Dr. E. Harry Walker, said the hospital system faced its third year in a row of “increasing operational losses.”
Those losses stemmed from inflation, inefficiencies, government reimbursements and a spike in charity care, he said in a video recording of the meeting.
“Like safety net hospitals across the country, MetroHealth faces significant financial challenges,” Walker said.
The board agreed with Alexander-Rager that MetroHealth needed “a mindset focused on innovation, efficiency and results if we want to continue fulfilling our mission for our patients and our community,” he said.
MetroHealth is also off track in meeting its new patient goals, according to the presentation to trustees. The hospital system aimed to increase the number of new patients by 2% this year, but so far has seen only 0.3% growth.
“After a very strong start of the year, new patient volumes have significantly declined,” the presentation read.