Beaumont Hospitals to lay off 2,475, cut 450 positions
So after the CEO effectively shuttered the Wayne site last week, and it was obvious they were hemorhagging cash, I feared this was coming.
My sister is currently awaiting word on her status, but more broadly speaking this is a bad, bad sign.
Sad but expected. A bright side might be a thinning of the unnecessary bureaucracy and admin with the health care system. Those are primary positions being thinned and cut
I hope you’re right, but it seems that hospital bureaucracats are like cockroaches and can multiple no matter the situation.
April 21st, 2020 at 10:44 AM ^
Eradicate as many suits as possible and give healthcare back to the doctors. Fuck the C-Suite.
I'd be pretty worried about the future, were I in the healthcare sector. There are TONS of waste in that system and this Covid situation is going to make a lot of it visible.
Just an opinion, but I think a lot of the healthcare system will be built back up as “non-essential” in-person services restart. That said, I could definitely see a more efficient and less costly system on the other side due to learnings on cost vs risk during this pandemic (for example effectiveness and frequency of video visits vs office visits - obviously can’t have 100% virtual due to needed testing, but why not 50% for some lower risk patients?)
I also think come the fall we will see the beginning of the higher education bubble bursting. Parents are not going to pay tens of thousands in tuition for online classes, nor should they (nor should lenders).
Selfishly, I'm a little worried about the higher ed gravy train stopping. People have been saying for a long time that MBA programs outside the top 15 were in big trouble. This might be the thing that puts them over the edge. I think that's a big reason why my employer pushed $100M to break into the middle top 10.
Regarding healthcare inefficiencies, I've done some work with these guys: https://aravind.org/
They're a very innovative healthcare system with health outcomes rivaling our own while delivering service at about 10% of the cost (and not just due to India being a cheaper place to do business).
There are UM grads throughout the leadership structure. All the business side people are Ross grads and the early medical people were trained at UM Kellogg.
April 21st, 2020 at 10:06 AM ^
One massive advantage that a portion of higher ed has - gargantuan endowments that they can use to strategically pivot their business model when the time comes.
April 21st, 2020 at 10:09 AM ^
That's not a particularly informed opinion. When people give money for endowments, they almost always specify very specifically how it can be used.
My employer has a "gargantuan endowment" from which they can only drawn from a portion the yearly earnings... which are currently massively negative. I'm sure #1 "gargantuan endowment" Harvard is the same.
April 21st, 2020 at 10:17 AM ^
I realize that many gifts are specifically allocated, but surely there is a good amount of money available that is non-allocated or in a general fund, no?
April 21st, 2020 at 10:31 AM ^
That non-allocated general fund is created with... tuition money. Schools have lucked out getting to keep this semester's money but I can't imagine that's going to continue.
My university is currently trying to figure out what's going to happen in the fall. One of the options is to offer online classes for free while allowing students to take the semester off if they choose. Faculty are on contract - our wages are a fixed cost - so that's going to represent a huge outlay of cash.
April 21st, 2020 at 10:12 AM ^
Endowments have almost zero flexibility and will in fact not allow higher ed institutions to handle this. The loss of tuition is going to be crippling for many schools
April 21st, 2020 at 10:16 AM ^
At least someone knows what they're talking about.
April 21st, 2020 at 10:21 AM ^
You're telling me that, say, a gift designated to Department X couldn't be used to make strategic changes to that department?
April 21st, 2020 at 10:27 AM ^
No. Not unless the gift was made stating some version of "for Department X to be used to make strategic changes." How likely do you think that is?
My University is getting ready to force retirements, fire essential people, and putting a ton of pressure on faculty not to use our research budgets. This is an Ivy. If the answer was "use your huge endowment like an ATM," they wouldn't be doing that. A lot of schools are going to be seriously fucked - just like everything else.
April 21st, 2020 at 10:32 AM ^
Where did I insinuate that endowments could be used like an ATM? Obviously you're not going to use them to cover salary shortages or the like. I was talking about using endowments in a long-term fashion to respond to overall changing face of higher education (i.e. whatever changes come from the new mass online education experiment we're in).
April 21st, 2020 at 10:37 AM ^
You don't know what you're talking about. Take the L, get slightly more informed, and move on. I'm done responding to you.
April 21st, 2020 at 10:55 AM ^
Funds aren't designated for Department X. Maybe they are there to fund a single professor whose focus is on one particular research (i.e funding a position in the history department for a specialist on China) that funding can't just be used across the history department. Or if the funding is specifically for a scholarship it can't just get used broadly for financial aid, etc., Endowments aren't flexible, they can't get used to meet shortfalls or needs due to drops in tuition funding, everything the endowment can cover it is already covering.
I'm just putting this here for context, not politics. Outside of the auto industry, I believe Beaumont is the metro area's largest employer.
April 21st, 2020 at 10:03 AM ^
"We have turned off the water to your dessert residence, but please use all the bottled water in your fridge on your cactus plants immediately."
April 21st, 2020 at 10:34 AM ^
Dessert is something you eat at the end of a meal. It has two 's" because it is good so you want two.
Desert is an area of very low precipitation. It has only only one "s" because it is bad and you only want one of it.
April 21st, 2020 at 10:40 AM ^
clearly the cake wasn't moist....that was his point
April 21st, 2020 at 11:05 AM ^
Now I want to live in a dessert residence. Like that cool lady in that Hansel and Gretel story.
Wait. I admittedly have no idea what I'm talking about. But -- aren't, like, more people than usual going to the hospital?
April 21st, 2020 at 10:00 AM ^
Yes, but there was profit in all that canceled outpatient surgery. Unfortunately for inpatient services, margins are thin. It’s not an equal trade.
April 21st, 2020 at 10:00 AM ^
No significantly less are going to the hospital overall, but more are going to the ICU and dying. Elective surgeries and procedures are much larger in number and bring in more money to a hospital
April 21st, 2020 at 12:29 PM ^
There are a lot of "elective" surgeries that don't seem very "elective" to me.
I guess it's a first world problem but if you have a heart problem, or have bone on bone joints that seems pretty pressing.
April 21st, 2020 at 10:02 AM ^
Outside of a couple, at most, hospitals - no way. To hear it told, some places are slower than they've ever been.
April 21st, 2020 at 11:10 AM ^
I know someone working on the University hospital ER. She said they're actually slower than usual right now because all the folks who used to come to the ER with concerns that really aren't emergencies are staying home
April 21st, 2020 at 11:46 AM ^
Yes, "emergency" visits are way down, and actual (non-COVID) emergencies are a bit down too with a lot fewer car accidents and such.
April 21st, 2020 at 12:44 PM ^
Have a friend who is an ER doc here in Denver who had his hours cut in half because there's no one in the hospital. He's offered to help with Covid issues and they are telling him "no thanks"....
There was a recent article about the massive revenue losses in Illinois hospitals due to the COVID-19 situation. The issue is that a large number of elective surgeries are being postponed. These are huge money-makers for the hospitals - for oldsters like me, just think of the assembly-line of colonoscopies and cataract surgeries that occur daily in many hospitals. Add in chest X-rays, mammograms and other diagnostic services (MRIs, etc), and you get a picture of the big revenue aspects of the health care system. Few people are going to go in for these procedures today, unless absolutely necessary.
April 21st, 2020 at 11:42 AM ^
I have reached the magical age that mandates screening colonoscopies. I was waiting to hear back from the clinic to get me on the schedule before this COVID outbreak blossomed. Can my family can stick a garden hose mounted with a web cam into my rear plumbing infrastructure to look for bad things?
I wonder if Beaumont will get any of the $75 billion in hospital bailout money that Congress is reasonably likely to approve this week?
Otherwise, yeah, {comic sans} it's a shocker that a business that has seen revenue plummet thinks it has to cut costs in order to survive. {/comic sans} Why would people think that hospital systems would have stockpiles of cash to ride it out?
Had a friend ask if my company had a "rainy day fund". I told him, nobody has a rainy day fund for revenue going to $0 for months on end. Our burn rate as a company is $1m per month and that's post layoffs in a private company, somebody's got to pay or we go under, and soon.
April 21st, 2020 at 10:00 AM ^
If this is the end of profit-driven medicine, then I’d be a happy man. These mega conglomeration hospital systems need to go. Can we please end the days of private practices being gobbled up by these soulless, money-driven corporations? I hope so, for the future of all my fellow Wayne SOM 2017 grads.
April 21st, 2020 at 10:13 AM ^
I'm an ER doc in Maryland who's group sold its to a private equity group a few years back. It's a terrible thing for medicine. Even the largest one - Envision just file for bankruptcy. Docs on the front lines risking their lives are taking paycuts in all of this.
I'm hoping this is the tipping point to get to value base medicine. It is criminal the amount of waste in our healthcare system right now.
April 21st, 2020 at 10:32 AM ^
Stay safe back there. I'm a FP doc and my wife is anesthesiologist. Her group also got bought by a much bigger group and they are all talking hits. I'm still working doing telemed but the volume has dropped. I'm happy to say that I haven't lost any money yet but it's getting close. The last few weeks have been tough because instead of just having to worry about taking care of patients, we're trying to figure out how to keep our businesses afloat.
April 21st, 2020 at 10:28 AM ^
it won't be because we don't demand it. like it or not, we all comply and resign ourselves to the status quo, which is what makes it the status quo. we'll all go back to putting up with all the things we don't like about the current system as soon as COVID has moved on from our consciousness because we'll go back to being busy worrying about paying our mortgages and what's on TV.
April 21st, 2020 at 10:19 AM ^
Let's praise hospital workers as heroes and have songs and fundraisers for them... then treat them like trash and fire them. Playbook stole from the treatment of our Veterans.
April 21st, 2020 at 10:32 AM ^
My two cents because I work for a major healthcare system. They are suffering, but have large reserves to survive this. However, every hospital will use this for an opportunity to trim the fat and ask for bailouts. Beaumont’s administration are snakes. They probably have the biggest surplus stocked up, and they are crying wolf the loudest. Maybe that’s the smart thing to do? I’m not sure about the ethics of it. But all hospitals are/will suffer. Some more than others. Eventually though, people will still need those surgeries, those admissions, this appoitnments, so they won’t suffer too long if they can get through this hump.
April 21st, 2020 at 10:41 AM ^
I’m tired of suits running healthcare into the ground. Give it back to the doctors.
If my older peers had any business sense they would’ve never allowed the C-Suite to exploit them. Financial idiots.
April 21st, 2020 at 12:41 PM ^
Ahh, the arrogant certainty of youth.
I’m tired of suits running healthcare into the ground. Give it back to the doctors.
Yes, the healthcare system in our country is extremely broken, but having doctors running the administration of hospitals and systems is not the solution.
April 21st, 2020 at 10:33 AM ^
Of course it would've been interesting to see if once in the red, they turned their medical debt goon squad against themselves.
April 21st, 2020 at 10:41 AM ^
^^ post of the day
April 21st, 2020 at 10:39 AM ^
This does not surprise me. Beaumont has not been well-managed for many years. When William Beaumont Hospital merged with Botsford, Oakwood, etc., a few years ago, it was out of financial necessity - they were near bankruptcy. Not much has improved in the time since.
April 21st, 2020 at 10:55 AM ^
"What is essential during a pandemic?"
Apparently not the employees in major urban hospitals.
April 21st, 2020 at 10:58 AM ^
The two competing national priorities in one story: stay home stay safe (especially medical workers for the latter, vs. economic need.
Can we please stop calling anyone who wants to prioritize the former a nazi totalitarian who wants to dominate everyone's movement and anyone who wants to prioritize the latter a nazi capitalist who wants to people to die so they can profit?
Anyone facing unemployment in this insanely stressful environment would be terrified. Anyone with a pre-exsiting condition or aged facing an infection from this virus - or anyone with a loved one in that situation - would be terrified. There needs to be a balance. It seems like the governments at the state and federal levels already have a plan to implement this. It's not been perfect on any side. Overall it seems like there has been and is a plan. The energy being wasted on all sides demonizing the other is wasted, and in my mind, is covering what has been a fairly successful response (by both parties) to a horrible pandemic. The curve was flattened, hospitals were not overrun, there is a plan to slowly re-start the economy.
The problem is that like many entirely predictable challenges, as a society, we don’t prepare for them in advance. There were multiple steps in the process where we as a country could have done things better to prepare for this. We chose not too. I’ve said it before and I am sure I will say it again, when you put people in charge of government who fundamentally don’t believe government works, you shouldn’t be surprised when you really need government to work that it fails.
April 21st, 2020 at 11:10 AM ^
Very sad to hear especially as we just spent $9.5 million on the TCF Center in Detroit to house....24 patients at last count.