David explains to the Boston Globe why Mass General Brigham is making layoffs. They have a 0 percent operating margin and face threats to their top line revenue plus rising costs. It's also a convenient warning to nurses not to strike.
‘Difficult but necessary’: Mass General Brigham does layoffs for second time in two years
David E. Williams, president of Health Business Group, a Boston management consulting firm, said he wasn’t surprised by the news of layoffs. For quite some time, he said, MGB’s operating margin has essentially been zero. While some clinical departments are big money-makers — he cited oncology, orthopedic surgery, and cardiac surgery — other departments lose money, including pediatrics, mental health, and endocrinology. He speculated that the latter departments might be the most vulnerable for layoffs.
Adding to the pressure on MGB, Williams said, were such Trump administration initiatives as the One Big Beautiful Bill Act. In January, new Medicaid work requirements take effect, which hospitals predict will increase the number of uninsured patients, ballooning their costs. Medicaid is the government insurer for millions of poor and disabled people nationwide.
“That zero margin could easily become a negative margin unless they’re proactive about it,” said Williams. “Their top line will decrease because instead of getting reimbursement from a private insurer or Medicaid, they’re going to be left with a self-paid patient who won’t be able to pay the bill and will become a charity patient.”
