Opinion: Challenging Times for Pillars of the Local Economy

‘Eds and meds.’

You hear that phrase repeatedly in reference to the local economy. It refers to education and healthcare, two of the largest sources of jobs in Western Mass.

And by education, we mean a broad spectrum, but especially higher education; this region is blessed with more than two dozen colleges and universities in communities ranging from Springfield to Amherst; Chicopee to Westfield.

On the ‘meds’ side, there are, likewise, a wide range of players, but the sector is dominated by its many fine hospitals, including all those within Baystate Health system as well as Mercy Medical Center, Holyoke Medical Center, Cooley Dickinson Hospital, and Berkshire Medical Center.

Both of these sectors remain strong, and they continue to be pillars of the local economy. But they are both being severely challenged, as evidenced by recent headlines and news items in BusinessWest.

Last week, Baystate Health, faced with $300 million in operating losses over the past few years, announced the first step in what it is calling a ‘transformation,’ the difficult decision to reduce 134 leadership positions across the Baystate system. That’s less than 1% of the workforce, but a significant workforce reduction nonetheless.

And it symbolizes the many challenges facing all hospitals today as they continue to recover from COVID-related setbacks that include higher costs, inadequate reimbursements, stern workforce challenges, and the ongoing need to invest in new technology and equipment.

Baystate has been in the headlines, but all area hospitals are struggling, and they are all making adjustments and hard decisions.

It is the same with many education institutions, a reality punctuated by a new organizational business plan announced at American International College (AIC). Dubbed ‘Pathway to Progress,’ it details an expansion of degree options, but also a comprehensive re-enrollment program to engage and recruit former students to return to AIC and complete their degrees, as well as cuts within the athletic program, including the return of the men’s hockey program to Division II and the discontinuation of two women’s programs.

“In an era of unprecedented disruption across the higher-education industry, it is more important than ever that we do all we can to ensure AIC can adapt and evolve to best serve our students — those we serve today, and in the future,” interim President Nicolle Cestero said of the new business plan.

Her comments, and that plan, help drive home the fact that this disruption — marked by demographic changes, the nationwide conversation about the value of a college education, free community college, and other issues — is not an AIC problem. It’s a problem for the entire sector. Indeed, noted institutions such as Brandeis University in Waltham, Lesley University in Cambridge, and countless others have embarked on their own cost-cutting programs and revisions to their business plans.

Most colleges and universities in this region remain on very solid ground and, like the region’s hospitals, remain sources of pride — and good-paying jobs.

But these recent headlines reflect the fact that these are, indeed, very challenging times, during which we hope these institutions can and will make the hard decisions and the needed adjustments to remain vital cogs in the region’s economy for decades to come.