Home Therapy fund Beaumont Spectrum confirms 400 layoffs amid mounting cost pressures

Beaumont Spectrum confirms 400 layoffs amid mounting cost pressures

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Beaumont Spectrum Health System confirmed on Friday that it was laying off 400 employees, mainly blaming inflation and the expiration of federal COVID-19 assistance.

It was a “difficult decision” to cut 400 workers out of a workforce of 64,000, according to a BHSH statement released on Friday. The layoffs target management positions and workers who don’t care for patients, the 22-hospital company said.

“Eliminations are not limited to any area of ​​our organization,” spokeswoman Ellen Bristol said in an email Friday.

The layoffs come seven months after the merger of Spectrum, based in Southfield, Beaumont and western Michigan. Company mergers often lead to downsizing.

“Our healthcare system, like others around the country, is facing significant financial pressures from historic inflation, rising pharmaceutical and labor costs, COVID 19, upon expiration of CARES Act funding and non-proportional reimbursement,” the health system said in a statement.

“We are grateful for the contributions and years of dedicated service provided by our affected team members and are working to help them find employment within our healthcare system and elsewhere,” according to a statement from BHSH. “We remain deeply committed to caring for our team members and our community.

The move came after Beaumont Spectrum reported in August that the nonprofit health system’s operating margin in the first six months of the year was 1.8%, which was below expectations. Officials said in the consolidated financials that “leaders are focused on cost containment initiatives” as well as “accelerating integration savings.”

“The organization saw its operating results deteriorate in the first six months of the year,” Chief Financial Officer Matthew Cox said in the health system’s consolidated financial statements. “This is the result of lower volumes and higher critical agency and personnel costs in our care delivery divisions.”

Health systems across the country have had mixed financial results this year, said Allan Baumgarten, a health care industry analyst in Minneapolis who tracks Michigan’s hospital industry. InterMountain Healthcare in Utah merged with SCL Health and posted higher profits, he said, while other systems are reporting losses from higher labor costs, loss of investment and other reasons.

“It’s no surprise that two big systems would merge and soon find they had a lot of duplicates in some jobs,” Baumgarten said of Beaumont and Spectrum. “Four hundred jobs in an organization of this size is not a big cut, but more cuts are likely to follow.”

In Friday’s company statement, officials tried to soften the blow of the layoffs by noting that Joint Health System had “hired approximately 10,000 people, primarily into open positions to directly serve our patients and members of the health plan”, since the beginning of the year.

Experts had predicted that the merged hospital system would likely avoid consolidations in service lines while creating buying power to reduce costs due to separate footprints with Spectrum on the west side of the state and Beaumont in the southeast. east of Michigan. The merger included Spectrum’s Grand Rapids, Michigan-based health insurance plan, Priority Health, which has 1.2 million customers.