St. Cloud, Minnesota-based CentraCare will lay off approximately 535 workers as it looks to cut costs, the health system confirmed to Healthcare Dive on Thursday.
The cuts will affect mostly administrative roles, however 30% of the impacted positions will be frontline workers.
The health system says mounting headwinds are to blame for jobs cuts. CentraCare operates 10 hospitals and a network of more than 30 clinics in central and southwest Minnesota.
“CentraCare is responding to significant external pressures including rising costs and reimbursement rates that no longer cover the true cost of care,” a spokesperson said in a statement. “To safeguard the organization’s stability and to continue delivering high-quality care, we have made difficult but necessary staffing adjustments.”
Layoffs and workforce restructurings have been on the rise this year, with Providence, NewYork-Presbyterian Health System, The University of New Mexico Hospital, Penn Medicine, Yale New Haven Health, Mass General Brigham, Jefferson Health and Lehigh Valley Health Network making changes to their teams in recent months, often citing concerns about growing financial challenges.
Analysts from Kaufman Hall and West Monroe told Healthcare Dive this week that they expect to see additional health systems make workforce changes in the back half of 2025 as they eye inflation, rising supply costs, reimbursement challenges and impacts from President Donald Trump’s reconciliation law, which includes cuts to healthcare programs.
Tyler Giesting, consultant at West Monroe, thinks most systems will opt to first reduce back-of-house staff, such as IT staff or revenue cycle management professionals.
Lance Robinson, managing director at Kaufman Hall, agreed and said most health systems could do a better job streamlining those tasks.
“Staffing is way out of line,” Robinson said. “Organizations may have shadow [full-time employees]. They’ve got a centralized IT department, but then radiology has their own IT people, laboratory has their own IT people — there are opportunities to fix that.”
