The Detroit Medical Center is laying off some of its 12,400-member workforce, but it has exempted workers at the heart of a recently concluded federal probe into dirty surgical instruments at its five Midtown hospitals.
The health system was set to lose all federal funding — which totaled $705 million last year — if problems with improperly sterilized surgical instruments weren’t fixed by Dec. 14. State and federal inspections were prompted by a six-month Detroit News investigation published in late August that found the hospitals had struggled for years with dirty, broken and missing surgical instruments.
DMC officials confirmed Tuesday the health system will immediately eliminate nearly 1 percent of its workforce, but they will exempt the Central Sterile Processing facility in the basement of Detroit Receiving Hospital that cleans and sterilizes surgical instruments used at Receiving, Detroit Children’s Hospital, Harper University Hospital, Hutzel Women’s Hospital and Heart Hospital.
“We have been hiring and remain in the process of filling vacant positions in CSP,” spokeswoman Melanie Moss said in an email late Tuesday.
Officials with the DMC’s for-profit owner, Tenet Healthcare, didn’t respond to questions about whether the DMC layoffs were part of a companywide effort by Tenet to reduce costs. Moss also did not respond to a question about whether the DMC layoffs were prompted by Tenet.
The health system released a statement Tuesday that read: “We regularly evaluate operations and staffing to enhance the quality of care and patient experience we provide. DMC operates in the most efficient way possible so we can continue to invest in our facilities and community. Recently, we made the decision to reduce approximately 1 percent of the DMC workforce. We minimized the number of affected employees by first eliminating open positions and realigning certain job functions, with careful attention to avoid affecting direct patient care.”
DMC followed a similar plan a year ago, announcing intentions to reduce its workforce 1 percent. It cited a need to be more efficient and noted layoffs were not a result of its performance.
Meanwhile, an investigation by the state Department of Licensing and Regulatory Affairs into the health system’s sterilization practices is still underway. The DMC has maintained that no patients were harmed or infected because of dirty instruments but has declined to release confidential records to prove the contention. Proving an infection is difficult because they can be caused by dozens of sources at hospitals.
The layoff news adds to employees’ uncertainty over the possible repeal of the Affordable Care Act under President-elect Donald Trump, as well as concerns about Tenet, which faces more than a half-billion dollars in penalties to the U.S. Justice Department to settle a variety of civil and criminal cases involving its hospitals.
Michigan is among 31 states nationwide where safety-net hospitals that serve the poorest patients, such as those operated by the DMC, have benefited from Medicaid expansion under the Affordable Care Act.
“Patients are going to be suffering more from these kinds of cuts, whether they’re from direct layoffs or from not filling positions,” said Donna Stern, unit chair of AFSCME Local 140 at Children’s Hospital of Michigan. “There are going to be fewer resources for patient care, (and) that’s going to have a negative effect on patient care and patient satisfaction.”
Stern said the DMC has added about a dozen employees in the Central Sterile Processing department, which cleans surgical instruments, since The News’ reports, and increased pay of some.
“The exposé forced them to hire workers, and to raise wages for one group of people, but if they hadn’t been exposed, if there hadn’t been a scandal, it wouldn’t have happened,” Stern said.
Tenet’s stock price has dropped nearly 50 percent this year amid growing concern over scandals and settlements, from $29.26 per share on Jan. 4 to $14.99 on Tuesday.
In August, the 79-hospital chain announced it offered to pay $514 million to settle civil and criminal charges brought by the U.S. Justice Department over a kickbacks scheme involving four Tenet hospitals. The facilities in Georgia and South Carolina allegedly paid pregnancy clinics in exchange for patient referrals from 2000 through 2013.
Earlier this month, a $1.5 billion putative class-action suit involving Tenet hospitals in El Paso, Texas, was moved to federal court. The suit alleges the hospitals failed to protect patients including newborn babies from being exposed to tuberculosis by knowingly allowing an infected hospital employee to work 12-hour shifts.
In Michigan, the DMC’s problems with dirty surgical instruments were “extraordinarily troubling” to Sheryl Skolnick, director of research and an equity analyst at Mizuho Securities USA Inc. She said she found reports “worrisome” because it fits into a history of Tenet ignoring longstanding problems.
Tenet hospitals have incurred roughly $2 billion in fines and legal bills over the past two decades to settle charges of fraudulent billing, unnecessary heart surgeries and other practices, she said.