Dive Brief:
- Novant Health will cut 160 full-time positions amidst an organizational redesign plan as the result of a “challenging healthcare environment,” according to a spokesperson for the health system.
- The layoffs at the Winston Salem, North Carolina-based nonprofit health system represent a 0.5% cut to its total workforce and will mainly impact management and administrative roles.
- The cuts come after the health system reported that salaries and employee benefit expenses had risen 7.6% year over year in its earnings report for the quarter ended June 30.
Dive Insight:
The cuts at Novant are part of changes “across the health system” aimed to help the company operate more efficiently, a spokesperson told Healthcare Dive.
Novant, which operates 16 medical centers and employs more than 36,000 total staff in North and South Carolina, also reported a 7.3% year over year increase in labor costs during its three-month earnings ended March 31.
The layoffs come as nonprofit health systems have been battered by inflationary pressures including higher supply and labor costs.
A report released this week from Fitch Ratings found that high labor costs are likely to continue into 2024. Health systems may have to “use other levers to control expenses,” including consolidating service lines, Fitch concluded.
The health system has been expanding this year. Novant announced in February it would acquire two North Carolina hospitals from Community Health Systems for approximately $320 million and it recently purchased Pender Medical Center, a rural hospital outside of Wilmington, North Carolina, from Pender County. Novant expects to invest $50 million into the center over the next ten years, according to a press release about the deal.
