- Ascension Michigan has laid off 500 workers at its 14 hospitals, including 20 in management positions, Crain’s Detroit Business reported.
- The layoffs — just over 2% of Ascension Michigan’s 26,000-person workforce — come as St. Louis-based Ascension saw total operating revenue drop $122.1 million during the last half of 2017 versus the same time period the previous year.
- More layoffs are likely once the Catholic health system concludes employee-to-patient ratio reviews and alerts its 25 collective bargaining units, Gwen MacKenzie, Michigan market executive of Ascension Michigan, told Crain’s Detroit Business in a recent interview. Those units account for about 5,800 employees, or 22% of the workforce.
Layoffs have become a common means by which hospitals cut costs in the face of lower volumes and rising expenses.
In January, Scripps Health announced plans to reorganize in 2018, including an unspecified number of layoffs, in an attempt to reduce costs.
Tenet Healthcare said in its 2017 Q3 preliminary results that it would shed 1,300 jobs, including some in its regional management layer, to save $150 million in operating expenses. And Lahey Health announced in October plans to lay off 75 employees to help bridge a budget gap.
Ascension has attributed the drop in second-half 2017 operating revenue to its divestiture of Saint Joseph Hospital and Door County Hospital, both in Wisconsin, as well as sales trends from 2016. Uncompensated care increased 6.1% to $56 million, and total operating expenses rose 1.5% to $162.7 million.
The hospital operator also blamed uncertainty over the Affordable Care Act for shifts in patient volumes. Total admissions fell by more than 16,000 compared with the same period in 2016.
The financial strain could be behind possible merger talks between Ascension and Providence St. Joseph Hospital out of Renton, Washington. The Wall Street Journal broke the story in December, but noted a merger was “far from assured.”
If the nonprofit systems do reach a deal, it would create the largest hospital operator in the country, with 191 hospitals in 27 states and annual revenue of roughly $45 billion — exceeding HCA.