Sioux Falls, South Dakota — One of South Dakota’s largest employers is laying off some workers as inflation drives up the cost of equipment and supplies.

Sioux Falls-based Avera Health said it was cutting nonclinical workforce hiring, including administrative employees, but not cutting jobs such as doctors and nurses.

In an emailed statement, Avera Health said, “We are resizing our organization with a greater focus on providing high quality patient care while redefining our core business focused on patient care. I will.” “Unfortunately, this means reducing our non-clinical workforce, restructuring our disciplines, and changing our services. We are working hard.”

It’s not clear how many people will be affected by Avera Health’s job cuts. Not specified in the emailed statement, Avera representatives did not immediately respond to follow-up questions.

Avera Health employs approximately 20,000 people at 37 hospitals, 215 clinics and 40 nursing homes in South Dakota, North Dakota, Minnesota, Iowa and Nebraska.

Avera Health isn’t the only company facing skyrocketing costs for supplies and equipment. This will force the healthcare system to decide how to cover the gaps in its balance sheets.

More than 50% of US hospitals expect negative operating margins this year, according to a recent report by Kauffman Hall and the American Hospital Association.

Goods alone were expected to remain 20-25% higher than they were before the COVID-19 pandemic began.

In that statement, Avera Health reported that it was facing an average cost inflation rate of 2-3% prior to the pandemic. The healthcare system is currently facing a 25-40% increase in the price of many common medical supplies and other equipment.

Avera Health said in a statement, “Although Avera is treating more patients than before, high inflation and other additional costs have increased the costs that need to be addressed.” Harnessing innovation, we challenge ourselves to be more efficient, focused and creative in looking at healthcare in a different and cheaper way.”