Trinity Health decides to cut more staff due to rising costs, faces $2 billion revenue loss

medical staff

Trinity Health is a Livonia based health system with 93 hospitals in 22 states. It has announced an unspecified number of layoffs, reduced shifts and extended furloughs in the wake of lesser patient volume, rising expenses and a projected $2 billion revenue loss.

Trinity Health Michigan announced furloughs of about 2,600 employees, which is about 10 percent of its 28,000-person workforce. But, some of the clinical staff who worked in elective health care services areas were recalled in previous weeks.

Out of the 2,600 furloughed in Michigan, 1,000 full-time equivalents or 3 percent of the workforce, is supposed to be either laid off or have their schedules reduced.

Rob Casalou, president of Trinity's Michigan, Georgia and Florida markets said that of those 2,600 furloughed in Michigan, 1,000 full-time equivalents, or 3 percent of the workforce, will either be laid off or have their schedules reduced.

Casalou mentioned that starting from July 1, Michigan faces a projected $400 million revenue loss in fiscal 2021. In June they were 60 percent of patient volume of February. By the end of the year the volume will be about 80 percent, though it is hard to predict the COVID-19 positive cases this fall.

The health system needs to make painful yet vital decisions to ensure that the ministry can be sustained in the long run according to Michael Slubowski, Trinity Health president and CEO.

Nearly for three months Trinity's hospitals had to shut down outpatient and elective services during stay-at-home orders, which cost the system billions in revenue and increasing operational costs, said Slubowski.

He also added that though they received funds from the CARES Act it had helped cover operating deficits for only a few months. It is not enough to sustain into the future.

There are positive signals that patients were returning for services, though the recovery is still slow. There are too many unknowns, due to the possible resurgence of the virus and the country’s economic recovery, said Slubowski.

Michigan’s 10 top hospital systems are expected to receive $1.7 billion as per the COVID-19 relief grand funds from the federal government and $2.7 billion in Medicare advanced reimbursement loans, which need to be paid back by the end of the year.

But the health system executives said that the $4.4 billion won’t cover financial losses incurred due to the coronavirus pandemic through June.