Workforce challenges persist as healthcare jobs are slashed By HPN Staff Health systems across the U.S. are laying off workers despite an ongoing shortage of health care staff, workforce analysts say. More than 40 hospitals and health systems have announced job cuts since the start of 2025, citing rising costs, shrinking margins and operational strain. Why it matters: The layoffs could deepen staffing shortfalls, raise costs for patients and destabilize local economies that rely on health care systems as major employers. Here’s how the impact is unfolding across the system: Strained staffing: These layoffs likely will exacerbate critical shortages, leaving fewer caregivers on the front lines. Rising costs and patient impact: With fewer staff available, hospitals may shift costs or reduce services, potentially affecting the quality of care. Local economic ripple effects: A recent Forbes article highlights how “hospitals often anchor the local economy, these layoffs risk triggering a devastating ripple effect, jeopardizing regional economic stability. Stakeholders say that without strategic intervention — through policy, funding reform or workforce investment — these short-term cuts could compound long-term crises in care delivery, workforce retention and community health. The bigger picture The wave of health care layoffs likely will go beyond short-term cost-cutting and have longer-lasting impacts, healthcare advocates say. A mix of aggressive industry consolidation, worsening workforce burnout and mounting financial pressure on families is converging to destabilize the nation’s already fragile health care system. Rising costs linked to consolidation: Decades of hospital mergers haven’t lowered prices. Instead, they’ve driven them up. According to the Kaiser Family Foundation, provider consolidation, especially among hospitals and physician practices, has been linked to higher prices for patients and insurers, with limited or no evidence of improved quality. This growing market concentration reduces competition, weakens local bargaining power and makes cost-cutting measures like layoffs more likely as systems seek to protect margins. Burning out the workforce: The U.S. surgeon general’s 2022 report warns of a national health workforce burnout crisis, with nearly half of health care workers experiencing symptoms such as exhaustion, anxiety and depression. This burnout is fueling high turnover rates and worsening the staffing shortages hospitals are trying to manage with layoffs. Middle-class families continue to feel the squeeze: A recent Gallup and West Health survey found that 11% of U.S. adults—equivalent to nearly 29 million people—are unable to pay for needed health care and prescribed medicine, marking a new high since 2021. This financial strain is particularly acute among Hispanic (18%), Black (14%) and low-income (25% of those earning under $24,000) households, exacerbating disparities in access to care.
