Beaumont Hospital Farmington Hills is restructuring several clinical services and reassigning employees as part of Southfield-based Beaumont Health's ongoing systemwide integration plan.
The clinical services changes at the 330-bed Farmington Hills hospital includes closing an inpatient pediatric unit, one medical-surgical unit and downsizing a rehabilitation unit. Some 67 employees will be affected.
The moves at the Farmington Hills osteopathic hospital are part of an integration and cost-reduction program that the Southfield-based system began in January 2019, five years after the merger with Oakwood Healthcare and Botsford Hospital that formed eight-hospital Beaumont Health.
Changes at Beaumont Farmington Hills are intended to improve patient care, reduce costs, increase efficiencies and streamline operations, officials have said. More changes at hospitals and in the corporate office are expected as Beaumont seeks to complete the promises of its 2014 merger that initially were billed as saving $134 million annually, Crain's reported when the merger was announced.
"The healthcare landscape is constantly changing and we need to adapt," Mark Bohen, Beaumont's senior vice president and chief marketing and communications officer, said in a statement. "Across the nation, and here in Michigan, patients are thinking of themselves more as consumers. They are shopping more for medical services than ever before. We know patients are interested in outpatient and retail services, so we are responding to what our patients are telling us and focusing on new services like outpatient centers and urgent care."
It is unclear how much Beaumont has saved since the integration and cost-cutting program began in early 2019, but more than 225 employees, managers and executives have been laid off or transferred to other assignments. Still, in interviews last year, Beaumont said the system grew its workforce by about 3 percent both in 2018 and 2019.
However, Beaumont officials said more is necessary in 2020. During the first three quarters of 2019, Beaumont's operating profit margins declined to 3.7 percent, compared with 3.8 percent in 2018 and 4 percent in 2017. Beaumont hasn't released its 2019 financial report.
Earlier this year, Crain's was told by Beaumont officials that corporate executives recently completed an analysis of the Farmington Hills hospital, formerly Botsford. They said the goals of the changes are to maintain quality and safety while increasing efficiencies, improving utilization and reducing avoidable costs.
Here are the clinical areas Beaumont plans to restructure:
- Closing the six-bed inpatient pediatric unit. The unit only serves one patient per day on average, Beaumont said. "Children needing pediatric inpatient care will be transferred to Beaumont, Royal Oak or other nearby hospitals," Beaumont said in a statement.
- Closing one 30-bed medical-surgical unit. "By consolidating medical surgical units, we can better meet the needs of our patients and families," Beaumont said.
- Reducing the number of staffed inpatient rehabilitation beds to 11 beds from 16 beds due to a declining average daily census of 10 to12 patients, said Beaumont, adding that more care is provided in outpatient settings. From 2018 to 2015, the hospital experienced a decline of discharges to 176 from 244, according to American Hospital Directory of Louisville.
Due to the various changes, 55 staff members who include registered nurses, nurse assistants and unit secretaries will lose their positions. Beaumont said they are being offered comparable, open positions at Beaumont Farmington Hills to ensure continuous employment.
Beaumont also has targeted elimination of 12 non-patient care employees. Workers are being offered other positions within the Beaumont system. Some employees have already been placed, Beaumont said.
Overall, these moves affect about 3.5 percent of Beaumont Farmington Hills workforce of 1,900 employees. Beaumont employs about 38,000 people overall.
In 2018, Beaumont Farmington Hills posted operating income of $47 million on net patient revenue of $410.6 million, for a 11 percent margin. However, because of unspecified "other expenses" of $50.3 million, Farmington Hills earned net income of $3.9 million, according to Medicare cost reports provided by American Hospital Directory.
