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Mass layoffs in US healthcare industry carried out to maximize profits

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Healthcare workers at Jackson Memorial Hospital,in Miami. [AP Photo/Wilfredo Lee]

The healthcare industry in the United States is laying off tens of thousands of workers to shore up profits, threatening to stretch a badly understaffed healthcare system past the breaking point.

According to a report by Challenger, Gray & Christmas, the healthcare sector laid off 58,560 jobs in 2023, a 91 percent increase over 2022. The sector only trailed the tech and retail sectors for most jobs wiped off the slate.

Overall, 721,677 jobs were cut last year in the US, nearly double the number in 2022. This is a deliberate class policy, aimed at smashing growing working class opposition through mass unemployment. High inflation monetary policy and the use of major advances in automation and artificial intelligence are the two principal weapons in this assault on jobs.

The latest healthcare layoffs come from Amazon, which recently announced several hundred cuts at its One Medical and Amazon Pharmacy operations. Across all of its divisions, the tech giant has cut more than 27,000 jobs in the recent period.

Mark Zandi, chief economist at Moody’s Analytics, candidly observed in the Washington Post about the mass layoffs, “That is the way the American capitalist system works. It’s ruthless when it gets down to striving for profitability and creating wealth. It redirects resources very rapidly from one place to another.”

But the layoffs in healthcare are particularly sinister because they are taking place amid the second-highest wave of the coronavirus pandemic, while the government has shut down all public health measures. The elimination of federal coronavirus funding has only exacerbated the cuts. This is an attack on the basic social right to healthcare, which the ruling class increasingly views as a wasted expense.

Even the figures cited by Challenger, Gray & Christmas are a vast undercount of the real staffing situation because they do not include the countless healthcare professionals who have been driven out of the system entirely by impossible and dangerous working conditions.

The attack on healthcare is also aimed at one of the most active segments of the working class which is striking against stagnant pay and worsening working conditions. According to figures collected by the Bureau of Labor Statistics, 16 out of the 43 major strikes last year were by healthcare workers, involving more than 112,000 workers combined. Cornell University’s Labor Action Tracker found 192 strikes and labor protests last year by healthcare workers. The trade union bureaucracy, however, fought tooth and nail to limit these strikes and impose sellouts, as it did in the strike by over 70,000 Kaiser Permanente workers late last year.

A review by Becker’s Hospital CFO Report last month found that105 hospitals and healthcare systems have cut jobs across the United States. Job cuts over the last six months include:

Illinois

In Chicago, two major medical centers, University of Chicago (UoC) and Rush, have let employees go, citing financial struggles for these decisions. UoC has terminated 180 workers (2 percent of its medical staff). Its president, Tom Jackiewicz, noted, “Outside pressures, including higher supply and labor costs, are converging as healthcare delivery rapidly evolves. Additionally, we grew our staff to address the pandemic, which was necessary for that moment but cannot be maintained.”

Rush has not disclosed how much of its staff has been axed but said in a written statement, “In response to financial headwinds affecting healthcare providers nationwide, Rush has undertaken a restructuring resulting in elimination of some administrative and leadership positions.” Notable, however, in 2022, the medical giant earned $2.6 billion, with net income increasing $18 million, according to tax documents.

Alivo Medical Center in Pilsen, which provides healthcare for migrants and asylum seekers, has slashed pay for its workers by at least 20 percent with a drastic reduction in hours.

Ollie Idowu, president and chief executive officer of the Illinois Primary Health Care Association, told Chicago Sun Times that many clinics across the state are struggling financially with the ending of the COVID-19 relief money and “instability of federal funding.”

California

Kaiser Permanente is laying off an additional 79 administrative employees after cutting 115 tech positions in December and 49 more administrative positions in October.

John Muir Health laid off 164 employees in Concord, after it sold its home health services division to Joliet, Illinois-based Cornerstone Home Healthcare last month.

Tri-City Medical Center in Oceanside let go nearly 100 employees to align operations with the decline in hospital volume, “which has been 25 percent lower than historical trends.”

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