TRAVERSE CITY — Munson Healthcare announced Monday that it will begin Phase 2 of its COVID-19 Recovery Plan that calls for streamlining of some services offered at more than one hospital, though no specifics have yet been released.
Every department across Munson’s seven hospitals is looking at where they can reduce costs, said Dianne Michalek, vice president of marketing and corporate communications. That could mean eliminating services, expanding telemedicine services and cutting jobs, she said.
“Unfortunately there are going to be some job eliminations,” Michalek said.
Changes will be put into place over the next 12-18 months, she said, and as decisions are made the community will be kept informed.
“It is always our priority to minimize the impact of change on people, but some job reductions are an unfortunate reality in order to structure our healthcare system for a sustainable future,” Ed Ness, president and CEO said in a press release.
Efforts will be focused on overhead and administrative functions, Ness said.
Some of the services at Munson are at 80 percent to 90 percent of what they were pre-COVID-19 and are not expected to return to full patient volumes for at least a year.
“Many services may never come back to 100 percent,” Michalek said.
Jason Judd, RN, works in the Munson Medical Center cardiac unit and is vice president of the Traverse City Munson Nurses Association.
“It’s important to maintain a streamlined health care system in the time of COVID,” Judd said. “We want to ensure the readiness to serve our rural community. But the current crisis should not be used to impose cost-cutting measures that have permanent long-term effects.”
The hospital saw a net revenue loss of about $140 million from March through June, she said, as well as incremental expenses from the pandemic for things like Personal Protective Equipment, ventilators, software and check stations for people entering the hospital. Those expenses came to about another $10 million.
One-time relief funding of $75 million from the federal government covers about half of those losses.
“That’s one-time funding that will not carry us into the future,” Michalek said.
Continuing to contribute to a loss in revenue going forward include people being nervous about contracting the disease. Household incomes and health insurance coverage are also affecting decisions to seek care.
The strain on federal and state budgets will have an effect on healthcare funding in the coming years, as Munson gets about 75 percent of its funding from Medicare and Medicaid.
Michalek said Munson Healthcare for many years has operated as a collection of hospitals, and is now looking at regional models of care. That means that some services, such as robotic surgery, do not need to be offered at every hospital.
“It’s very inefficient and costly to have the same services at every facility you have,” Michalek said. “It’s just a way to streamline decision-making and how we use resources, how we deliver care to the community.”
But it’s not always about eliminating services.
“It’s about reinventing or reworking them,” she said.
The pandemic is a good example of streamlining services, she said, as only three hospitals, including Munson Medical Center, took COVID-19 patients. That way ventilators and PPE could be concentrated in areas where they were needed, and the infection would be kept out of other hospitals.
Phase 1 of the plan went into effect in April and included reducing employee hours or furloughing them, putting capital projects on hold and reducing pay for all vice-presidents and above by at least 20 percent, depending on their role.
An expansion of the surgical unit that was underway when the pandemic hit is on hold, though the community may see some work being done to protect the new section from the weather, Michalek said.