Tenet's Detroit Medical Center plans for more job cuts
(Updated at 2:40 p.m. ET)
Detroit Medical Center will see a new round of job cuts in the coming weeks, mostly among its executive team.
In a letter to employees Monday morning, the medical center's CEO, Tony Tedeschi, noted that he already cut 14 positions from his management team last year, but that more will likely be necessary.
"These decisions are extremely difficult, and we do not take them lightly," he wrote, "but they are necessary to align DMC with the healthcare landscape today and to ensure we can invest in opportunities for DMC's future."
The cuts are part of a broader restructuring that Tenet Healthcare Corp., the Dallas-based investor-owned health system that owns the medical center, announced in October. The effort is designed to save $250 million, mostly through eliminating 2,000 jobs.
John Truscott, a spokesman for Detroit Medical Center, said there isn't a specific number of jobs targeted for cuts. Rather, Tedeschi and his team are evaluating across all eight facilities that make up Detroit Medical Center to determine how to make operations more efficient.
The majority of layoffs will likely take place at the management level, he said.
"Over the years, the management layers have built up, so this is probably something that should have been done several years ago," Truscott said.
Each of Detroit Medical Center's hospitals have similar leadership positions, such as chief marketing officers and chief information officers, Truscott said. In some cases, one of them will be able to cover two or three hospitals.
Truscott said the layoffs are not a directive from Tenet, but rather from Tedeschi's own direction for the medical center. That said, the number of jobs cut will count against Tenet's 2,000 jobs goal.
In some cases, the hospital will reassign existing employees to new positions in lieu of laying them off, as well as hire new people to fill roles it deems critical for the future. The medical center continues to hire nurses and other frontline workers, for example, Truscott said.
"That's where the priority is, keeping that patient experience as positive and healthy as possible," he said. "Not to say there won't be (cuts), but that's certainly not the target."
Detroit Medical Center, which has about 11,000 employees, also plans to 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.
The medical center is in the midst of its own restructuring, as it looks to adapt to its community's needs. Tedeschi said the layoff announcement follows months of comprehensive market analysis. Detroit Medical Center has struggled with low patient satisfaction and quality scores, and is launching an 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.
Tedeschi also wrote that he wants to improve first-year employee retention rates. Truscott couldn't say which departments or facilities are losing more new employees, but he said it's expensive for the medical center.
Detroit Medical Center also plans to boost its partnership with Wayne State University, Tedeschi wrote. The two have had a rocky relationship that includes a dispute over Detroit Medical Center's agreement with a large pediatrics group, complaints over job cuts and other hospital systems looking to partner with Wayne State's medical school, according to Crain's Detroit Business.
In addition to its market-specific problems, Tedeschi wrote that Detroit Medical Center is under 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.
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 had directed Detroit Medical Center to cut 150 jobs by the end of 2017, Modern Healthcare reported.
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