Mass General Brigham to cut jobs amid $250Mn deficit
MASSACHUSETTS, UNITED STATES — Mass General Brigham (MGB), the largest healthcare system in Massachusetts, has announced plans to cut hundreds of administrative and non-clinical jobs as it faces a US$250 million budget shortfall over the next two years.
The layoffs, described as the largest in the organization’s history, are part of a restructuring initiative aimed at improving operational efficiency and reducing redundancies.
The job cuts will be implemented in two phases, beginning this week and concluding in March 2024. According to the organization, affected employees will receive severance packages and extended benefits.
Financial struggles despite investment gains
MGB has been battling financial challenges for years, driven by rising expenses, capacity constraints, and operational inefficiencies. While the healthcare system reported US$2 billion in net income for fiscal 2024, most of these gains came from investments rather than core operations. The organization posted an operating loss of US$72 million for the year, up from US$48 million in fiscal 2023.
“If we do not take definitive action now to stabilize our financial health, we compromise our ability to continue to invest in our mission,” said Dr. Anne Klibanski, MGB’s president and CEO, in a message to employees.
This decision follows an 18-month performance improvement plan completed last year that saved US$197 million, primarily through price reductions.
Outsourcing as a potential solution
While MGB has not explicitly announced plans to outsource roles affected by these layoffs, outsourcing could serve as a strategic option for addressing its financial challenges. In recent years, MGB has explored outsourcing in specific areas such as its digital unit, where voluntary separation programs were offered in late 2023 to align workforce skills with evolving organizational needs.
Outsourcing administrative functions like IT support, billing, or supply chain management could help MGB reduce overhead costs while maintaining focus on its core mission of patient care. This approach would also allow access to advanced technology and specialized expertise without significant upfront investment. A 2024 report highlighted that some U.S. healthcare systems are increasingly turning to outsourcing as a way to manage financial pressures.
However, outsourcing comes with its own risks, including potential disruptions during transitions and concerns over data security. For now, MGB appears focused on internal restructuring rather than external partnerships for cost-saving measures.
Concerns over workforce impact
While MGB has assured that frontline healthcare roles will remain unaffected by the layoffs, concerns persist about the broader impact on employee morale and patient care.
“Reducing the overall workforce by such a large number will add significantly to things like stress levels, burnout, and workload of clinicians,” said David Rosenbloom, professor at Boston University School of Public Health.
The restructuring highlights the mounting financial pressures faced by healthcare systems nationwide.
As MGB navigates this challenging period, its ability to balance cost-cutting measures with maintaining high-quality care will be closely watched by industry stakeholders and policymakers alike.
