Surprise Hospital Cuts
M.D. Anderson enacts austerity measures amidst Houston's booming economy
While Houston continues to receive national attention for its strong economy and employment numbers, the University of Texas M.D. Anderson Cancer Center announced it will be enacting austerity measures that will freeze wages, delay construction efforts and halt new hiring.
Thanks to an email obtained from an undisclosed source, The Houston Business Journal reports that the hospital system does not plan to cut staff through layoffs, but hopes to decrease employment a full one percent by not filling all currently vacated positions. M.D. Anderson maintains roughly 19,000 employees.
Construction on the system's new Pavilion building as well as its forthcoming West Houston Diagnostic Imaging Center will remain on schedule. A host of other projects — like the renovation of its Rotary House renovations and a new radiology outpatient center — have been suspended.
"This has been a fulfilling year of unprecedented progress and recognition and a challenging year of accelerating financial pressure,"says M.D. Anderson president Dr. Ronald DePinho in a message sent to faculty on May 14.
"While you’ve done incredible work, our operating revenues have grown more slowly than our operating expenses, and we project that our operating income for fiscal year 2013 will fall far short of expectations."
Despite an uptick in gifts and investment income, DePinho explains that revenues have dropped and points to recent "external challenges" facing the health care industry — namely, the implementation of the Affordable Care Act and the funding issues stemming from the federal budget sequester.
"We can’t run the institution at an operating loss," the email continues. "All of us are responsible to help turn things around. I hope these are temporary measures."