Health systems nationwide are struggling to regain their financial footing after the pandemic.
Locally that has led to hiring freezes being instituted at Strong Memorial and Rochester General hospitals for non-critical positions.
The belt-tightening measures by the University of Rochester Medical Center and Rochester Regional Health — the city’s two largest employers — do not apply to doctors or other patient-facing jobs.
A spokesman for URMC said the institution continues to “aggressively recruit for roles that are essential to fulfilling our clinical, research and educational missions.”
“Everything is under control, and there’s no need to worry,” read an email that URMC’s director of talent acquisition Carmen Vincent-King sent to staffers this week.
URMC paused hiring this month. While revenues have been climbing, expenses are rising faster.
URMC has seen personnel costs soar — up 52% since 2016 — fueled by expenses for traveling nurses and other temp workers. The organization posted a nearly $80 million loss on a $5 billion budget last year, the first time in more than a decade it recorded a negative operating margin.
Rochester Regional’s latest tax filings show the organization breaking even, though Rochester General lost nearly $14 million in 2022, while Rochester Regional broke even, tax filings show. The 2023 filing was not yet available.
Both URMC and Rochester Regional hope to break even this year. Or come close.
“Despite our collective best efforts, we are entering our fourth straight year of not achieving a 2% margin, which we rely on to invest in our people, programs and projects across all mission areas,” URMC’s senior vice president and CFO Adam Anolik wrote in a recent email to senior managers.
A similar scenario is playing out with Rochester Regional.
“Like many health systems nationwide, Rochester Regional Health faces ongoing challenges with the high cost of contract labor and medical supplies. We also contend with inadequate reimbursements from Medicaid and Medicare, which cover nearly 60% of our patients,” read a statement the organization provided in response to questions.
Both organizations say the hiring freeze — or pause, in their words — is not systemwide. But a URMC spokesman added that all affiliates, Highland Hospital being one, are “taking a hard look at whether to fill non-essential roles” until the financial outlook clears.
URMC plans to keep the hiring freeze in place through October. Anolik wrote that cost-saving efforts now could “provide a safety net and reduce the need to take stronger actions in the fall.” The last time URMC took such action was back in 2020, also freezing pay, limiting overtime and furloughing workers.
