Merged Excela, Butler health system lays off 13 managers

GREENSBURG, Pa. (KDKA) - The newly merged Excela and Butler health systems announced more than a dozen layoffs. 

Thirteen manager level positions were eliminated in an effort to reduce operating expenses. It's a move experts say was already in the works when the two health systems merged in January.

Hospitals and health care systems across the U.S. have been experiencing financial difficulty since the COVID-19 pandemic began, citing staffing shortages, skyrocketing labor costs, inflation and rising interest rates.

The newly combined Excela and Butler health systems are no different, announcing on Thursday they've laid off more than a dozen managers as part of its cost-saving plan. It's a move healthcare consultant James McTiernan says is "not surprising." 

"I think things like this would happen because obviously one of the benefits of a consolidation is to lower your cost structure and eliminate redundancies and you don't need two of everything," said James McTiernan, the vice president of Gallagher Benefit Services.

Chief marketing and communications officer Tom Chakurda sent KDKA-TV a statement saying: 

"Our new system confirms that a total of 13 managerial positions have been eliminated from both sides of the organization. The positions were derived from various support functions; they were not ones related to direct patient care. This action represents an aspect of our initiatives to reduce expenses in light of the economic pressures our industry and our system are facing."

The two health systems merged in January and according to the Post-Gazette, both hospitals reported huge operating losses -- Butler $23 million and Excela $15 million for the six month period ending Dec. 31.

This economic storm forced a "significant expense reduction plan," which unfortunately cost 13 managers their jobs.
However, McTiernan believes this is to ensure the helath system's future. 

"They have every intention of surviving and thriving and this is just a part of that. I'm sure there are more changes to come as they combine their resources and expertise and we'll see other things but their intention is to survive and thrive."

There's been no word if future layoffs are expected.