Beaumont-Spectrum lays off 400 in cost cuts post-merger


Beaumont Health Spectrum Health is laying off 400 management and non-patient facing workers statewide, it confirmed Friday.

The newly merged health system said in a statement that it will cut 400 positions from its staff of 64,000 as part of a cost-reduction plan alluded to in its first consolidated financial report Aug. 18.

“Since the beginning of the year, we have recruited around 10,000 people, predominantly into open roles directly serving our patients and health plan members. We have also made the difficult decision to eliminate about 400 management and nonpatient/health plan member-facing roles from our 64,000 team members,” BHSH said in a statement.

BHSH did not immediately respond to a request about where within the system the layoffs are occurring.

The health system attributed the layoffs to “significant financial pressures from historic inflation, rising pharmaceutical and labor costs, COVID 19, expiration of CARES Act funding and reimbursement not proportional with expenses.”

The health system said it is working to help the affected employees find work elsewhere within the system or at other employers.

Beaumont lost nearly $100 million in the first half of this year, a negative 5 percent margin. Those losses were offset by stronger financial performance of BHSH’s Southwest Michigan operations and its insurance arm, Priority Health, the report said.

Spectrum Southwest Michigan logged an operating income of $139.7 million on revenue of $1.92 billion in the first half of 2022, while Priority reported income of $91.4 million on revenue of $3.11 billion.

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Spectrum Health Lakeland in Southwest Michigan this week said it is cutting two dozen leadership positions amid inflation, lower reimbursements and the merger with Beaumont, according to a Wednesday report in the Herald Palladium in St. Joseph.

The Lakeland system reported an operating loss of $3.1 million in the first half of 2022, excluding federal and state COVID-19 pandemic relief, according to the BHSH financial statement. Relief funds of $6.4 million brought the system’s net operating income up to $3.3 million for that period.

The Spectrum Health Lakeland system includes hospitals in Niles, Watervliet and St. Joseph, along with 60 outpatient locations and three walk-in clinics.

The Beaumont system in Southeast Michigan includes eight hospitals, 155 outpatient locations, nearly 5,000 physicians and 33,000 employees. Spectrum Health West Michigan has 11 hospitals, three rehabilitation and nursing centers, 120 outpatient sites and 4,000 physicians.

This story first appeared in our sister publication, Crain’s Detroit Business.


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