Kaleida Health Closes Two Therapy Clinics Amid Federal Funding Cuts

The closures reflect a multifaceted financial strain on Kaleida Health, one of the region’s largest healthcare systems. While federal funding reductions from the "One Big Beautiful Bill Act" have contributed to the decision, other factors such as increasing costs for medical supplies, labor, and facility maintenance, alongside difficulties in recruiting and retaining specialized staff, have played significant roles. "Kaleida Health is facing a complex set of challenges that require difficult decisions to ensure long-term sustainability," the health system stated, emphasizing that the closures were not driven by a single issue but by a combination of economic pressures.

The impact of these closures extends beyond the 31 employees who will lose their jobs. Patients who rely on these clinics for physical, occupational, and cognitive therapy now face the challenge of finding alternative providers. Phil Stokes, a Hamburg resident who received cognitive therapy at the Maple Road clinic following a traumatic brain injury in 2017, expressed concern about the closures. "Working with their staff, they were very patient, they were compassionate, and they were very good at keeping me on track," Stokes said, highlighting the quality of care he received. He noted that the closures could particularly affect Medicaid patients, who may face longer wait times and reduced access to specialized care due to the broader strain on the healthcare system.

Kaleida Health is committed to supporting both affected employees and patients during this transition. The organization is collaborating with its Human Resources department to connect the 31 impacted workers with other job opportunities within the system or elsewhere. Additionally, Kaleida is maintaining services at the clinics for 90 days to allow most patients to complete their treatment plans and is notifying patients of the closure timeline while providing information on alternative providers in the area.

The broader context of these closures involves a challenging environment for healthcare systems across the United States. The "One Big Beautiful Bill Act" has introduced reductions in Medicaid funding, with Kaleida Health facing a projected $165 million annual loss, according to union representatives. Nationwide, these federal cuts could total $880 billion over a decade, representing a 29% reduction in state-financed Medicaid spending per resident. In New York, this is expected to result in the loss of 72,000 healthcare jobs and $6.7 billion in federal funding in 2026. However, Kaleida Health’s challenges are compounded by local issues, including rising operational costs and persistent staffing shortages, which have strained its ability to maintain all facilities.

The closures have also heightened tensions between Kaleida Health and its unionized workforce, represented by the Communications Workers of America (CWA) and 1199SEIU United Healthcare Workers East. Earlier this year, contract negotiations focused on concerns over staffing ratios and job security, with unions warning that financial and operational pressures would exacerbate existing shortages and overburden the healthcare system. Although a tentative three-year labor agreement was reached in July 2025, avoiding a potential strike, the issue of staffing remains unresolved, with discussions on staff-to-patient ratios deferred for further negotiation.

Local advocacy groups and elected officials are being urged to address the complex challenges facing healthcare providers in Western New York. Kaleida Health has pledged to work with local, state, and federal stakeholders to find solutions that protect the region’s healthcare infrastructure. However, the closures of the Amherst and North Tonawanda clinics highlight the broader difficulties of balancing financial sustainability with patient care in a strained economic environment.

As the November 10 closure date approaches, patients and employees are preparing for the impact. For individuals like Phil Stokes, the loss of these clinics represents a significant disruption in care and a broader erosion of community health resources. "It's going to be more difficult for people to find a provider," Stokes noted, underscoring the human cost of these decisions. With healthcare systems nationwide grappling with similar economic and operational pressures, the ripple effects of these challenges are likely to persist for years to come.