Petoskey Hospital Announces Cuts, Layoffs

Nov 10, 2010

Leaders at Northern Michigan Regional Hospital in Petoskey have announced major cuts to health services.

As part of the cost savings, the hospital will end inpatient mental health services, and babies who need more than a couple hours on a ventilator will be sent for care in Traverse City or Grand Rapids.

About 65 people will lose their jobs, and the hospital hopes to trim nine million dollars from the budget by the middle of next month, as the hospital's new fiscal year begins.

CEO Reezie DeVet says those services being cut are available in places such as Traverse City, Alpena and Kinross.

"One of the things that we looked at is, 'If we divested ourselves of these particular services, were there other providers in our area that would be able to provide that service?'" DeVet says.

She says the cuts announced to hospital staff this Monday are designed to keep the hospital financially healthy. DeVet says the amount of uncompensated care, that is healthcare the hospital provides that it never gets paid for, has grown by 160 percent in the past five years.

"So we are talking about millions of dollars in reimbursement that we are not getting, or getting in a delayed or reduced amount," she says.

Like Munson in Traverse City, NMRH ended talks of a possible merger with Spectrum Health earlier this year. But the Petoskey hospital is still looking for another larger player to merge with.

DeVet says it's time for a major upgrade to the hospital's building, and that would be expensive.

With economic woes in the state, and questions over national healthcare reform, hospitals all over say their bottom lines are increasingly precarious, and NMRH is only the latest northern Michigan hospital to show outward signs of struggle.

"I think what we want to do s actually get ahead of this curve, so we need to look at how we can improve our cost structure," DeVet says.

NMRH just this year came to the aid of another northern Michigan Hospital. Cheboygan Memorial no longer has a birthing ward, and it's being sold to a downstate nonprofit.

In Manistee, West Shore Medical Center told IPR back in 2009 it had been struggling for years to keep in the black. It reduced its bed count and got some extra assistance from the federal government, becoming a "critical access" facility.

When contacted for this story, the head of the Manistee hospital only would say: "West Shore Medical Center is doing fine."