Oct. 19, 2022

Sanford Health is eliminating an undisclosed number of jobs, as part of what its CEO calls an effort to streamline its leadership structure and simplify operations.

In an all-staff email, Bill Gassen said the health system has spent the past two years bringing “renewed focus to our central purpose of delivering exceptional health care. This includes making new investments to advance the care we provide, closing out programs outside our core mission and reducing administrative expenses.”

Affected employees work primarily in non-clinical areas, and the staff reduction “will not adversely impact patient or resident care in any way,” Gassen said.

“These changes have been driven by our recognition that at the end of every decision is a patient or resident, and that remains our focal point as we move our organization forward.”

Sanford is offering many impacted employees the chance to take on other roles or is encouraging them to apply for open positions across the organization, he said.

“We are doing all we can to support affected colleagues and want to keep them in the Sanford family,” Gassen said. “We are currently hiring for more than 6,000 positions, mainly in patient-facing roles.”

Looking ahead, “we are focused on strategically managing our business in ways that advance patient and community health while remaining committed to being a premier employer in the region for decades to come,” he continued. “This is all part of a planful effort to strengthen our focus on the patients, residents and families we care for.”

Sanford’s move illustrates a broader theme in health care as many systems struggle to bridge the gap between revenue and mounting expenses.

A recent report from the American Hospital Association found “hospitals and health systems have repeatedly confronted a range of financial and operational challenges, including historic volume and revenue losses, as well as skyrocketing expenses,” it said. “When coupled with rising inflation and growth in input prices, these expense increases have been severely detrimental to hospital finances, leading to billions in losses and over 33 percent of hospitals operating on negative margins.”

According to data from the Bureau of Labor Statistics, hospital employment is down approximately 100,000 from pre-pandemic levels, the AHA report continued.

“At the same time, hospital labor expenses per patient through 2021 were 19.1 percent higher than pre-pandemic levels in 2019. Labor costs account for more than 50 percent of hospitals’ total expenses,” it said. “Therefore, even a slight increase in these costs can have significant impacts on a hospital’s total expenses and operating margins.”