Am I Next? Layoffs, Outsourcing at Centegra Health System

Another health organization has announced mass layoffs after a major multi-million dollar loss for the year.

According to published reports, Centegra Health System plans to redress its $52.3 million loss for the recently ended fiscal year by laying off approximately 131 support and administrative workers.

In addition to layoffs, it will be outsourcing another 230 jobs to nThrive which already runs the business and IT operations at Centegra. This should come as no surprise to anyone observing the domestic outsourcing trend to avoid legal entanglements with personnel by employing an independent intermediary as a.buffer between an organization and its personnel. 

Of course, management had plausible reasons for the losses other than, of course, a failure in leadership: opening a new facility, more Medicare and Medicare patients, and billing adjustments and other write-offs.

Centegra CEO Michael Eesley wrote in an employee memo: “The difficult decision to balance our workforce through a reduction will ensure our health system is financially viable for years to come. While this day marks a major step toward financial improvements, it brings change for people in a number of positions."

It would be no surprise if this was some form of pre-merger tuning and preparing the stage to remove duplicative services without major legal or procedural hassles as it has been reported that Centegra is still working to finalize an affiliation or merger agreement with Chicago-based Northwestern Medicine. The deal expected to close in 2018 is said to involve no money and there are no details in potential changes in management.

Employees should add the use of local outsourcing of organizational functions to their list of continuing employment red flags.