Detroit Medical Center will cut jobs in the coming weeks as it struggles to adapt to pressures in the healthcare industry.
In a letter to employees announcing the layoffs Monday morning, the medical center’s CEO Tony Tedeschi noted that they started at the top. Last year, he said he cut 14 positions from his management team, but that he expects further consolidation to come.
The cuts are part of a broader restructuring Tenet Healthcare Corp., the Dallas-based investor-owned health system that owns the medical center, announced in October. The effort is designed to save $150 million, mostly through eliminating 1,300 jobs. Tenet did not disclose how many jobs will be cut at Detroit Medical Center.
The medical center is in the midst of its own restructuring as well, as it looks to adapt to its community’s needs. Tedeschi said they layoff announcement follows months of comprehensive market analysis. Detroit Medical Center has struggled with low patient satisfaction and quality scores, and is launching a new effort to improve people’s perception of its care. Tedeschi said staff will also work to “significantly reduce readmissions,” and achieve zero preventable harm events this year.
In addition to its market-specific problems, Detroit Medical Center is feeling the same pressures as the rest of the hospital industry: stagnating admissions, a shift in demand toward outpatient services, declining government reimbursement and a growing number of Medicaid and Medicare patients and a higher number of commercially insured patients who can’t shoulder their portion of their bills.
The hospital will reassign some of its existing employees into new positions, as well as hire new people to fill roles it deems critical for the future. Detroit Medical Center will look for ways to grow its outpatient services, ensuring it has “the right access points and footprint to satisfy the needs and care preferences of our patients,” Tedeschi wrote.
Tenet, the nation’s third-largest hospital chain with 77 hospitals, reported a net loss from continuing operations of $366 million in the third quarter of fiscal 2017, up from a loss of $9 million a year earlier. Tenet directed Detroit Medical Center to cut 150 jobs by the end of 2017, Modern Healthcare reported.