William Beaumont Hospitals, a three-hospital regional health system based in Royal Oak, Mich., has announced a series of job cuts, pay freezes and reductions in employee vacation and sick time.
Kenneth Matzick, Beaumont's CEO and president, said the health system will layoff 353 employees at Beaumont's three hospitals in Royal Oak, Troy and Grosse Pointe, Mich., and at subsidiary companies.
The pay cuts will affect executives, doctors and managers who were exempt from salary freezes in 2008. Combined sick pay and vacation time will be cut by three days, to 30.
"Through outstanding expense management and better revenue management, we had gone from a $30 million loss last year to a positive $13.8 million net operating income through the end of June this year," Matzick said in a statement. "But our progress has been eroded by market conditions – such as continued job and insurance loss, below-budget patient volumes and a continued shift to government insurers that pay us less. We were at risk of losing money for a second year and can't let that happen."
Matzick insisted the cuts would not affect patient care.
According to reports in the Detroit Free Press, the current round of job cuts at Beaumont is the third in a year. Previously, Beaumont cut 584 positions to offset losses of $29.5 million on operations in 2008 and another $184.7 million on investments and other non-operating income, a net loss of $214.1 million.