Image via Steven Saing.
The University of Texas MD Anderson Cancer Center -- the jewel in the crown of Houston's medical center -- will lay off 800 to 900 employees, executives said Thursday morning.
The layoffs come at a time when Houston's thriving medical sector has been seen as a reliable bastion of the local economy, even as Houston's energy sector has been mired by layoffs amid low oil prices.
MD Anderson President Ronald DePinho said the job cuts are necessary to support the financial stability of the internationally-acclaimed institution. "It has become clear that we must act to protect our ability to continue investing in our mission to end cancer," DePinho said at a press conference.
The center's executives stressed that no doctors will be laid off and emphasized that patient care should not be affected by the job cuts.
"I can assure you that the health and safety of our patients will not be impacted by these changes, and we will continue to provide the world's best cancer care to those counting on us to save their lives," DePinho said.
The organization's leadership described several factors that have led to its recent financial struggles. Among them: escalating health care costs, reduced reimbursement rates from insurers, and a narrowing of insurance health care networks at a time when health care needs are expanding.
Executives also alluded to challenges with their implementation of a new electronic health record system, which leaders say is not showing the productivity gains they had initially anticipated.
About 12 percent of the layoffs will affect those in managerial positions, from mid-level managers up to vice presidents, said Dan Fontaine, MD Anderson's executive vice president of administration.
The center has suffered three straight months of operating losses and had a deficit in excess of $111 million in the first quarter of the 2017 fiscal year, the Houston Chronicle reported last month.
DePinho's recent $208,000 bonus was the largest of any of the 11 presidents in the University of Texas System last year and brought his total compensation to more than $2 million, the newspaper recently reported.