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.
April 21st, 2020 at 11:18 AM ^
Bronson hospital system will be announcing the same thing today at noon (Bronson is Kalamazoo, Battle Creek, South Haven all along that stretch of I-94 and south). Don't know the numbers yet, but will likely be around the same %. Bronson employs around 9,000 people. They are not expected to make job cuts, just furloughs. Executive leadership is taking a 25% pay deduction, leadership is taking 10% pay deduction. Ironically, Bronson CEO retired in 2019 after 30+ years in the role, and the new CEO started just weeks ago. Hate on C-levels as you will, I doubt anyone envies him right now.
But yes, it truly is "simple". The hospitals are overrun with COVID-19 patients but the high revenue generating parts are shutdown. Bronson is losing roughly 1 million dollars of revenue a day just in shutdown services. Like others said this is quantifiable numbers today. But the questions of, when will this be over affect the decions? June? July? August? What if there is round 2 when it is "over" what if it comes back in the fall? All of these things need to be answered.
You also have to understand, healthcare systems can't just shut their doors and go out of business. This isn't a restaurant, or a car dealership, or a retail store - their would be regional calamity if a hospital shut it's doors. For example we were told Bronson has about 45 days of "cash on hand" meaning it can afford to keep operating for 45 days... You see that, you understand.
April 21st, 2020 at 12:09 PM ^
Are they really being overrun? It seems like some hospitals in limited numbers had peaks, but those have passed.
And it's OK if the answer is no, the hospitals are not now and never were overrun (for the most part). That's exactly what we wanted. If policy erred on the side of reducing risk then excellent, that's exactly what they should have done. Now it's left to use that data to inform the next steps.
And I realize I'm the one without any data here, but I don't want to base my view on anecdotal evidence (i.e. I have a sister-in-law who such and such). I'd like to see data on hospital capacity by day during this crisis.
April 21st, 2020 at 12:34 PM ^
I think a lot of smaller hospitals not in the hot spot areas are mostly empty and are suffering because of it. My mother works at one such hospital and she only works every other week because no one is coming into the hospital. I think they have had 2 or 3 Covid patients in total.
That hospital also did not put any protocols in place to deal with Covid patients and are treating them as any other ICU patient. They seem woefully unprepared for something they should have seen coming a few weeks out.
Outside of Metro Detroit, most ERs aren't too busy. And yes, that's a sign that social distancing has been successful.
And therein lies the great unknown - once folks feel more comfortable "reopening" states and businesses and whatever, will there be a second round and what will it look like? Do we go back to shelter-in-place again? Is it less or more severe? Will we just become comfortable wearing masks ALL THE TIME in public? Will we no longer hug and shake hands? Do office parks just remain empty?
Quite often hospitals are among the largest employers in smaller communities. Five years ago in Michigan we had about 45 independent hospitals. Today there are just more than 10. After this there will be less and and many smaller satellite facilities will close.
April 21st, 2020 at 11:25 AM ^
My sister is a nurse in a so called covid hotspot. They also laid off staff because there simply aren't many covid patients at all in contrast to what the media is presenting.
April 21st, 2020 at 12:21 PM ^
I'm definitely NOT a socialist, but I believe the ridiculous pay gap between CEO's and workers (for example) is more than can be explained by how hard you work. I think much is due to privilege (which is not at all an evil thing), some might be due to varying degrees of institutionalized inequality (which is an evil, but harder to identify and quantify), and much more is inherently due to our system of capitalism (which is not necessarily an evil thing, but does entail some greed and inequity). I don't know what the ideal solution is to this market economic reality (aside from a very well thought out and equitable tax system, on top of the promotion of charity and voluntary means of wealth redistribution). But it's okay to point out that it is a problem, and it should be possible to do so without being confused for a commie. As the gap between the wealthy and the poor widens, and the middle class disappears, and poverty increases, it just starts a countdown to an eventual collapse. Better try to start fixing the problems now.
April 21st, 2020 at 12:45 PM ^
Sorry, this was meant to be a reply to a comment on this subject above.
April 21st, 2020 at 12:55 PM ^
Income inequality in the US is massively overestimated. If you make $35K per year, you're in the top 1% of income earners worldwide, but you're well below the median income in the US.
There's a reason that poor people in much of the world want to get to the US so badly. The standard of living that we take for granted is out of reach for the majority of people on the planet.
The gap in pay is the effect of globalization at work. When you allow companies to offshore labor but continue to sell their products in the US, this is what you get. A gutting of the middle class while the owners of capital get outsized returns. We need to balance the needs of capital with the needs of labor and bring back all essential manufacturing immediately.
Chief economist of Nomura (Richard Koo) gave a great speech about it in 2018 talking about how the west has been losing to the east for 20 years and how it needs to stop or Trump will be just the beginning of voters expression of frustration.
April 21st, 2020 at 12:37 PM ^
http://publichealth.lacounty.gov/phcommon/public/media/mediapubhpdetail.cfm?prid=2328
USC study showing mortality rate is much lower than expected - about 0.1%. No need to kill so many people with this lockdown
April 21st, 2020 at 12:46 PM ^
While I believe that the measures that have been taken are an overreaction, one study of a relatively small number of self-selected people doesn't prove that on its own. You can make a case that these measures are inappropriate even if the mortality levels are as high as they've been estimated to be prior to these studies.
The sample size is reflected in the margin of error. Claiming the sample size is too small is not a valid critique unless you have reason to believe they computed the margin of error incorrectly.
April 21st, 2020 at 12:51 PM ^
These studies they've done in California suffer from multiple serious flaws ranging from lack of knowledge about the sensitivity of the test, to self-selection of the sample, to dubious adjustments of the raw data. I'm absolutely positive the disease is more widespread (and therefore less deadly) than the official count of confirmed cases; I'm equally positive that the numbers these Cali studies have come up with are inflated.
I agree the study is flawed BUT I would argue these studies (they've done one in LA now as well) are no less flawed than the ones put together by Neil Ferguson that caused all gov'ts to go into panic and shut down the world.
So far, whether you think we should stay shut down or we should reopen, all studies on this are completely flawed.
Austria has done a study where they got a true infection count of 3 to 10 times the official count. Now Austrias official count is much better than ours (far more testing per capita) so I could see a 15-20 times undercount in this country being quite feasible. But people do have to remember that this caveat exists with the flu too. The flu is severely undercounted every year probably more so than this is, so even with all this in consideration the typical flu is much less deadly.
April 21st, 2020 at 12:50 PM ^
This is the kind of thing that shouldnt happen in a 1st world country. Healthcare isnt just a line of business. I get the economics here but the political side needs to step up here.
The lockdown has caused far more damage to our hospitals than the virus. This should make it blisteringly obvious, but the lockdown needs to end now.
If hospitals are shutting down, that's because people are not using the hospitals and not getting the medical treatment they need. I wonder how many additional people will die of cancer in the next year because doctors couldn't detect it in time to effectively treat it.
TL;DR: We bent the curve in many parts of the country, economy is being absolutely crippled, why can't we start to open up the economy with people who are low risk and in areas where there was never an ICU crisis?
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I recently went through the data published by the IHME (research group affiliated with the University of Washington). They have state-by-state data including information on hospital bed utilization. Out of the 50 states, 20 had peak ICU bed utilization higher than 50% and 7 were north of 100% (NY, CT, MA, RI, NJ, MI, GA).
IMO, the frustration that we're seeing from those protesting is that the stay-at-home measures appear to have worked in most of the country and, in 30 states, we had significant excess capacity (less than 50% utilization) in the ICUs. My understanding of the intent of the shutdown measures was to bend the curve, not eliminate the disease and prevent people from ever getting infected. We're not going to eradicate this disease any time soon, we just need to be sure we can treat those who are severely impacted. In much of the country, it would appear we've proven we can do that. The news has focused on a few states where things have been really bad. Think about all the states you've heard nothing about in the last 30 days.
Further, in the month-plus that this has been going on, medical professionals have gotten smarter about treatments and we know very clearly which segments of the population are at the highest risk.
The stay-at-home measures have not had a marginal impact on the economy. The economy is being stressed like never before. I work in finance with what I'd call lower middle-market businesses (those with revenues between $30MM and $200MM). Many of the companies I work with are industrial businesses based in the rust-belt. These companies are barely hanging on. These companies are frequently part of a larger supply chain (think of all the auto suppliers, but it expands well beyond auto). If a larger business loses even only a handful of key suppliers, the ripple effects through the supply chain will add to the delay in getting our economy back up and running.
The broad range of governmental support has been helpful, but the current program is a lifeline that lasts about 2-3 months.
It would seem reasonable to me that we can get people back to work who are in the low risk demographics and live in states where hospitals were never near capacity. You still mandate distance and sanitation measures as much as possible. Large events (sporting, trade shows, concerts, etc) can't happen. However, restaurants, retail, manufacturing facilities, consumer services (barber shops, nail salons, etc.) movie theaters would all be able to manage using revised operating models, face masks, etc.
I hate that this topic is getting politicized (of course it is!), but there seems to be a mentality among those against trying to open up the economy that if we all can't go back to work, none of us can. This has to happen in waves and there seem to be many places in the country where using some logic, we can try to get things running again.
According to IHME the virus is currently at its highest prevalence or about to be in most states. Re-opening right when the curve is starting to bend down isn't a response supported by research or any public health official. If you are talking an easing of restrictions beginning in mid-May I think you't get a different response. You know how everything points to places being 2 ish weeks behind Italy since they got hit first? They are beginning to ease restrictions May 4th. The idea of the US re-opening before Italy isn't using logic or research or evidence.
It was split exactly 50/50 by state (25 each way) whether the peak utilization was before or after April 20 and the bend that is happening in many states is so far below peak ICU bed utilization.
Can New York or Connecticut open this week or next? Of course not. The following states had peak utilization below 50% and the peak is behind them (Peak ICU bed utilization rate %): Note : I pulled these numbers last Thursday.
- Illinois (49%)
- Indiana (47%)
- Vermont (41%)
- New Hampshire (40%)
- Nevada (39%)
- Mississippi (33%)
- North Carolina (29%)
- Maine (28%)
- Colorado (26%)
- Tennessee (24%)
- California (24%)
- Alaska (15%)
- West Virginia (15%)
- Ohio (15%)
- Idaho (15%)
For comparison:
- Connecticut (1,465+%)
- New York (776%)
- Massachusetts (649%)
- Rhode Island (583%)
- New Jersey (395%)
- Michigan (141%)
To me, the idea that we need to treat the names on these two lists the same doesn't make sense.
Can I ask where you get these numbers from?
Comparing US to Italy is oranges to apples. Vastly different demographic and geographic distributions. Significantly different infection vectors (Italy's Silk Road Initiative had brought large numbers of Chinese workers into the country all fall long). Most of the Rocky Mountain west is socially distanced by its nature and did not require the degree of isolation than say a vermin infested metropolis like NYC (Before anyone gets upset that was a joke based on my personal dislike for large cities not a commentary on anything).
All of these factors should have been considered BEFORE the decisions were made
I like the way you think. I'm not sure whether you're sitting in Michigan or not; we now have Cobo Hall and Suburban Showplace outfitted with 1,250 beds that are almost entirely going unused and have been for almost two weeks now. There are two dozen or so people in Cobo out of 1,000 beds. New York is swimming in ventilators now; so are we, and GM and Ford are now cranking out tons more.
With this kind of capacity opening up throughout the country, surely we can go get a haircut and buy some paint. Even in the worst of it, Michigan never did see the doomsday scenario; now we have even more capacity that is really only useful for COVID patients.
The real pandemic will come in the form of depression, alcoholism, drug addiction, suicide and untreated disease.
But stay at home and be safe........
If opening the country up for business will save just 1 life from addiction or suicide it will be worth it
April 21st, 2020 at 10:00 PM ^
I like how people bring this up but we don't care about drug addicts or depression any other time of the year. But during Covid outbreak it's "won't anyone think of the suicidal/addicted/mentally ill??"
I'm a medical device rep and 95% of my business comes from electives. As stated already above, hernias, ortho, spine are the absolute cash cows for every facility.
It's akin to major college football/basketball = elective cases, olympic sports = everything else.
So many hospitals are going to have to follow suit and pivot right now.
Also some reps, like myself, will have to live on base salary for a while. While other more fortunate reps that work for other companies are being paid a decent (80%) percentage of their last year's commissions. That said I'm blessed to have my job and my health. Hopefully those affected by this downsizing will be able to bounce back quickly.
Then maybe you would be a good person to ask this: why on God's green earth is ortho still so lucrative (for practitioners and facilities alike, let alone device and equipment manufacturers)? Why have they escaped the attempts of the government (medicare) to slash payments for any procedure that pays more than a pittance?
They haven’t honestly. A total knee or total hip used to pay the surgeon over 3k in the 90s. It now pays $6-800 depending on the insurance.
And payments for hips and knees continue to get slashed they are such a large line item on Medicare’s budget that it’s easy to look at them and say “oh look we do 500k knee replacements a year and pay $800 lets cut that to $600 and save a shit load of money”
I have a ortho/spine medical device start-up, so I can speak to this a bit. Ortho/spine practice (along with CV) are the main profit centers for hospitals. True that reimbursements have come down in ortho/spine, particularly in the elective cases (like knee/hip arthroplasty), but those have become so “automated” that they are pushing those procedures to ASCs and making up revenue through higher throughput and volume.
Spine still remains one of the most profitable lines of business. A quick comparison. Ortho locking screw: $125. Spine pedicle screw: $800
Wow our medical capacity is overwhelmed, how will we ever survive the pandemic