Munson Healthcare says it will cut 25 administrative jobs, alter services and cut capital projects, as it deals with financial losses incurred during the pandemic.
Munson’s CEO and President Ed Ness says the network of hospitals in northern Michigan lost about $150 million between March and June due to a decline in patients and increasing expenses, including higher costs for obtaining personal protective equipment.
Federal aid provided in the CARES Act only covers about half of the hospital system’s losses, Ness says, and the hospitals haven’t received it all yet.
And while there are few COVID-19 cases in the region, he says the hospital network continues sees a 10-20% decline in patients for some services, and he expects that to be the case for at least the next year.
Munson hospitals prepared for losses early in the pandemic when several employees either took pay cuts, were furloughed or had their hours reduced. But it wasn’t enough, Ness says.
Munson will now eliminate 25 leadership positions at several hospitals in the region. Though staff providing direct care, including doctors and nurses, will not lose their jobs.
“(The cuts are) really to make sure we have the resources to focus on the direct patient care positions,” Ness says.
He says the system needs an operational shift with a focus on immediate needs, like improving supply chains, embracing telemedicine and altering services that now have fewer patients because of COVID-19.
“I think we had always contemplated change in how we deliver services, and what the COVID crisis has done is sped up those changes,” Ness says.
Munson didn’t provide many specifics. Ness says some changes have already gone into effect, and others will be coming in a few weeks.
Jason Judd, a RN at Munson Medical Center and the vice president of the Traverse City Munson Nurses Association, says the nurses weren’t informed about the changes.
“The current COVID-19 crisis, which is temporary, should not be used to impose cost-cutting measures that would have permanent long-term effects on this health care system that needs to serve this rural community,” he says.
CEO Ed Ness doesn’t anticipate that will be a problem.
“We will make sure we are committed to our local communities in quality and care and I’m really positive about where this positions us going forward,” he says.