DMC to furlough 480 workers to curb costs amid coronavirus pandemic

Christine Ferretti
The Detroit News

Detroit — The Detroit Medical Center on Wednesday announced its placing 480 workers on furlough as a cost-cutting move to cope with restrictions hitting Michigan hospital units amid the coronavirus pandemic.

In making the announcement, Detroit Medical Center Chief Executive Officer Audrey Gregory said the medical system remains on the front lines, "working together with our communities in Detroit to see this through."

A man wearing a mask walks past Detroit Medical Center Sinai-Grace Hospital in Detroit on April 9, 2020.

"With stay-at-home orders and government restrictions on elective procedures, some hospital units — which are not related to the COVID-19 crisis or other critical patient care needs — have been temporarily closed or ramped down," Gregory said in a statement.

"We have taken steps to divert additional resources to COVID-19 care and other urgent medical procedures that cannot be deferred. This includes reducing costs, and hours worked, and implementing furloughs of certain jobs, where needed."

Gregory said DMC hopes to return the impacted staff to work once the core business of the health care system returns to normal. The DMC has about 12,000 employees. 

"These actions do not impact direct bedside nursing care for COVID-19 and do not impact emergency or medically necessary care access for patients with other medical conditions," she added. "We remain appropriately staffed to provide our full support to treat patients in greater Detroit."

The hospital is among those across Michigan strained by the pandemic and opting to scale back on employee pay and benefits as a means of weathering the crisis. 

Hospitals across the state in March began discontinuing elective procedures and focusing efforts nearly exclusively on coronavirus and other emergency care, said Ruthanne Sudderth, senior vice president of public affairs for the Michigan Health and Hospital Association. 

"We estimate that in the last three to for weeks, our member hospitals have lost well over half a billion," said Sudderth of the statewide network of 134 acute care centers and 23 specialty hospitals. "It's a whole new world."

DMC's staff reduction plans come one day after McLaren Macomb Hospital said it was planning temporary furloughs for 10 to 20 nurses there due to the effects of the virus outbreak. 

The 288-bed acute care hospital and health care provider in Mount Clemens serves Macomb County. It has more than 400 physicians and nearly 2,000 employees.

On Wednesday, McLaren Medical Group said its working with physicians to determine who might be furloughed for the next two months.

"Like many healthcare systems across the country and here in Michigan, this national health crisis has significantly impacted our operations," said Julie Lepzinski, president and CEO of McLaren Medical Group, in a Wednesday statement.

"As we address how we continue to provide essential care for our patients in line with the governor’s order and CDC recommendations, our patient volumes have been reduced by more than 60%."

In response, McLaren is adjusting hours of operation while maintaining access for essential care, and the medical group has expanded telehealth services. 

The medical group, she said, is reviewing patient volumes and doesn't have final numbers or locations identified yet for furloughed doctors. Those impacted will maintain a certain level of compensation and continued health coverage. 

"Of the nearly 500 providers we have across Michigan, all will continue working throughout this health care crisis," she added. "However, many will have reduced working hours based on the needs of our communities and the patients we serve."

Earlier this month, Trinity Health, a national Catholic health care system with five hospitals in southeast Michigan and another five elsewhere in the state, announced furloughs for 2,500 employees from its Michigan workforce. Senior executives also were taking pay cuts, officials there have said. 

Meanwhile, Tenet Health, the Dallas-based hospital chain that owns the Detroit Medical Center, already has suspended its contributions to employees' 401(k) plans across the country.

“While we have postponed the annual funding of our 401(k) match until later in the year, we are providing furloughed employees with the match now so they can have that resource in the near term," Gregory said Wednesday. 

Hospitals have implemented cutbacks while awaiting emergency funding from the state and federal governments, including dollars being made available through the federal CARES Act and a $25 million allocation approved by the Michigan Legislature.

On Friday, officials announced state hospitals and other health care providers will receive $936 million in federal funding under coronavirus relief legislation passed last month.

The funding, announced by the Department of Health and Human Services, is part of $30 billion for hospitals nationwide as part of the CARES Act. 

Sudderth said incoming revenue is plummeting by hundreds of millions as hospitals are shouldering more unbudgeted expenses, such as personal protective equipment, ventilators and new beds to stand up to surge areas for COVID-19 patients. 

The federal and state funding is a start, but additional aid is desperately needed since the state's health system losses are continuing on a weekly basis. 

"The number of people needing respiratory support and COVID care has skyrocketed," she said. "We are very concerned about the long-term viability of some of our hospitals, who were already operating on very thin margins and facing some difficult financial challenges."

DMC's Gregory said in the Wednesday statement that the furloughed staff will receive medical benefits and that DMC will cover premium contributions for the time being. 

Those impacted, she said, also will be eligible for state unemployment benefits. 

"For many roles, these benefits could provide eligible individuals with a significant majority of their income as a replacement," Gregory said.