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Beaumont hospitals announce layoffs and job cuts because of COVID-19 related revenue losses

Paulette Parker
Michigan Radio

One of Michigan’s largest hospital groups is laying off employees and cutting executive pay. Beaumont Health which operate eight hospitals is temporarily laying off thousnds of employees and eliminating 450 positions.

Beaumont has 38,000 employees at its eight hospitals in the Detroit region. 2,475 will be laid off. That's about 6.5 percent. Most of those layoffs involve hospital administrative staff and others who are not directly involved in patient care.

John Fox is president and CEO. He says Beaumont lost hundreds of millions of dollars in the first quarter of this year because of the COVID-19 pandemic.

“A lot of our surgical revenue and other revenue streams have dried up. They’re gone. And so, we’ve eliminated 85-90 percent of our surgeries during this period and, frankly, a lot of other procedures,” Fox said.

Fox says the health system had to convert surgery related areas at its hospitals because they were needed for COVID-19 patients.

“That meant we were converting every O.R., every PAC-U [Post Acute Care Unit], post anesthesia recovery unit, a whole bunch of other locations to be critical care units, to be ICUs with ventilator-dependent patients suffering from COVID-19,” Fox said during an online news conference.

While Fox did not offer the average pay cut for executive staff, a news release indicated those cuts were as high as 45 percent. He indicated he's taking a 70 percent cut in his base pay.

Beaumont did receive $75 million from the federal government in April, but it was not nearly enough to make up for shortfalls in income. In an opinion piece carried by some news outlets, Fox called on the government to bail out hospitals across the nation.

Lester Graham reports for The Environment Report. He has reported on public policy, politics, and issues regarding race and gender inequity. He was previously with The Environment Report at Michigan Public from 1998-2010.