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Brigham and Women’s Hospital, a Harvard-affiliated teaching hospital, will offer a voluntary contract buyout for 1,600 employees—roughly 9 percent of its workforce—to downsize its staff amid increasing expenses.
In a statement Thursday, the hospital reaffirmed its commitment to its patients while acknowledging the need to “right-size” its workforce. According to the Boston Globe, labor constitutes roughly two-thirds of the hospital's operating costs.
“Our expenses continue to rise while constraints by government and payers are keeping our revenues flat,” the statement reads. “This is negatively affecting our financial health, and we need to work differently in order to sustain our mission for the future.”
Two big projects have also weighed down the hospital financially— a $510 million, 675,000 square foot outpatient and research building and a new computer software system, which launched in 2015 and is estimated to have cost $335 million, according to the Boston Globe.
“We owe it to our current patients—and those who will need our care in the future—to tackle the unprecedented financial challenges we are facing so that Brigham Health is here to care for patients, transform medicine and educate future health care professionals for generations to come,” the hospital’s statement reads.
Around 18,000 people currently work at Brigham and Women’s. The Longwood hospital is part of the Partners HealthCare System, a collection of hospitals which includes Massachusetts General Hospital and Newton-Wellesley Hospital, among others.
The Globe also reported that only workers over the age of 60 are eligible for the early retirement buyout, which includes one year of base salary. Physicians, researchers, and Harvard Medical School faculty are ineligible for the offer.
The buyouts also come as President Donald Trump seeks to stem federal funding to the National Institutes of Health in a budget proposal that has been widely condemned by Harvard scientists and administrators. Brigham and Women’s is a top recipient of NIH grants, according to its website, and has an annual research budget of more than $485 million.
“The hospital community is embracing the challenge and finding innovative ways to improve care while lowering the cost trend,” Tim Gens, executive vice president of the Massachusetts Health and Hospital Association, wrote in a statement to the Globe. “However, with changes to the healthcare system being proposed in Washington, the challenges are becoming more complex and threatening.”
Also on Thursday, the U.S. Attorney’s Office announced that Brigham and Women’s will pay $10 millions to resolve allegations of stem-cell research fraud. The researchers, who are no longer affiliated with Brigham and Women’s, allegedly included falsified data in publications as well as grant applications to the NIH.
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