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Hospital officials say what this boils down to is the patient's ability to pay for their long-term care. They say they are having a hard time paying their medical bills.
So now the hospital is in a spot where they need to reduce their overall budget by 10 percent in order to keep certain programs in place and to continue caring for patients as they always have.
For the last several months, hospital officials have been in a hiring freeze, travel has been limited and department heads have been asked to start streamlining budgets. That was several months ago but now deeper moves are necessary.
Officials say patient care will not be affected. Employees we talked to say that given the number of patients that they see on a daily basis, they are surprised by the announcement.
"It's just a part of life. I've been an employee here for 20 years. We are going to make it. We'll be all right," said hospital employee Shandra Benjamin.
"Even though they may cut ... probably at the top, they need the employees because we stay busy in here. We got to take care of the sick people somehow," said another employee, Dalphane Mumphord.
Hospital officials say each department head will have to decide where cuts will be made. They have not made any announcement as to the number of people who could possibly lose their jobs or where the cuts will come from.
The hospital has also announced that they will delay all capital improvement projects. They are also delaying about 20 percent of clinical trials at the hospital.
A national economist we spoke to says M.D. Anderson is not the first hospital to face these types of cuts, given the current economic times. Economists say they are starting to see more and more hospitals go through this type of measure.
M.D. Anderson currently employs about 18,000 people.