Nearly three dozen hospital employees in northern Michigan will soon be out of a job.
McLaren Northern Michigan officials said the job cuts are due to the current state of the economy, coupled with mandated health care reform.
Hospital officials released a statement Monday on the 30 job cuts, which will include management as well as staff positions. McLaren Northern Michigan is located in Petoskey, but has a medical campus in Cheboygan and several other communities across the area.
In the release, hospital officials said that despite the Strategic and Financial Plan developed by McLaren Northern Michigan to offset the economic pressures, recent changes announced by the federal government are far and above those that were previously reported.
The official release is below:
The current state of the economy, coupled with mandated health care reform, has affected both the way consumers seek health care and the way payors reimburse for health care services provided. This has affected hospitals and health systems nationwide.
Despite the Strategic and Financial Plan developed by McLaren Northern Michigan to offset these economic pressures, recent changes announced by the federal government are far and above those that were previously reported. Sequestration alone will negatively impact Medicare reimbursements at McLaren Northern Michigan by 2%, which represents a loss of over $1M by the end of September. The impact of the Federal Budget currently being negotiated will go far beyond the negative effects of sequestration. It is expected that further reductions in Medicare and Medicaid reimbursement could reach as high as 8%. Medicare and Medicaid reimbursements already fail to cover the cost of the care we provide, resulting in an ever-increasing shortfall.
Our ability to respond to these changing conditions is critical to our long-term sustainability. We remain committed to our mission to provide the best value in health care as defined by quality outcomes and cost. In order to achieve success in our key growth initiatives and stimulate new revenue opportunities, controlling costs is critical. Therefore, several cost reduction measures will go into effect immediately at McLaren Northern Michigan. In addition to reevaluating departmental budgets and operational process, a workforce reduction will occur that will put McLaren Northern Michigan on par with industry standards. This reduction will be equivalent to approximately 30 Colleagues, to include management as well as staff positions.
"We are mindful of the difficulties faced by families in today's economy," stated Reezie DeVet, President & CEO of McLaren Northern Michigan, "and reached this decision only after careful study. We are committed to providing the highest quality care to the communities we serve, and must ensure that we are reducing costs where appropriate. By doing this, we can invest in and grow those services that are critical to the communities we serve today?|and into the future."