Ochsner Health’s announcement that it’s laying off 770 employees across its 42 hospitals and 200 urgent care and health centers in Louisiana and Mississippi sent a signal the healthcare industry is struggling. Louisiana Hospital Association President and CEO Paul Salles says hospitals nationwide are facing a tough operating environment largely driven by inflation.
“Both on the labor side and related to non-labor issues like supplies, drugs and other types of expenses,” said Salles.
Salles says he would not be surprised to see other hospital systems also reduce their workforce.
Salles says regionally labor expenses have increased by over 25-percent and the cost of drugs and other supplies have increased about 20-percent. He says hospitals do not have the ability to raise prices like other industries.
“Our payments are largely driven by government payers, Medicaid and Medicare as well as contracts with large insurance companies, they just don’t adjust and change that quickly,” said Salles.
Salles says acute care hospitals are in line with about a three-percent increase in federal dollars, so government funding is not keeping up with the actual costs of running a hospital.
He says the Louisiana Legislature is trying to help as Turkey Creek Senator Heather Cloud has a bill to create a healthcare workforce fund with surplus dollars.
“Key to this obviously investing in workforce, we think that’s one of the highest priorities for our industry as we are working with some of our state policymakers, so I certainly think those things will make a big difference, said Salles.
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