The Detroit Medical Center is going through another round of layoffs as parent company Tenet Healthcare Corp. of Dallas also begins the process to close or sell its remaining four MedPost urgent care centers in Southeast Michigan.
Four knowledgeable DMC sources tell Crain's that several hundred employees have been laid off with more expected by the end of the year, including managers in multiple departments, nearly 100 newly hired nurses at Children's Hospital of Michigan and employed physicians at Tenet Physician Resources.
DMC officials confirmed there have been layoffs, but they declined to provide numbers or affected departments.
A Tenet official confirmed Tenet will close by Dec. 1 or sell four MedPost urgent cares in metro Detroit. Five of the nine were sold or had their leases taken over earlier this year, said Tenet spokesperson Lesley Bogdanow. There is an agreement to sell three more to Dearborn-based First Choice Urgent Care.
Sources say other employees laid off include physical therapy assistants at DMC Rehabilitation Institute, administrative assistants for physicians and nursing departments at multiple hospitals, nursing coordinators for labor and delivery, nursing educators and at least one intravenous team.
Employees at the management level also have been terminated, including the director of patient care services at DMC's downtown hospitals and those working on rapid response teams. Other ancillary clinical staff have been asked to take time off every pay period until the end of the year, whether they have paid time off or not, sources said.
"Employees are on edge," said a nursing supervisor. "There has been some informal insinuation that increased scrutiny would be given to employees who contracted COVID-19. (Those who did not) use PPE appropriately ... would be fired."
In a statement, DMC said: "Like many health systems locally and nationally, we continually evaluate and review our staffing needs, which have decreased due to reduced patient demand during the pandemic. Our goal is to ensure we are strongly positioned to provide the highest quality and safest care to our patients while making the best use of our resources."
Tenet and DMC declined to provide an interview or further information.
In 2019, DMC generated $101.7 million in net income on net patient revenue of $1.72 billion, a 3 percent decline from $1.78 billion in 2018, according to Medicare cost reports provided by Louisville-based American Hospital Directory.
Over the past six years, DMC has laid off or furloughed more than 2,000 employees, or about 17 percent of its workforce of 12,000.
Earlier this year, Tenet said it planned to cut nearly $450 million in expenses and in August officials said it had trimmed overall expenses by 11 percent during the second quarter that ended June 30.
The Dallas-based hospital chain has been among health systems across the country hit hard financially by the COVID-19 pandemic, which has claimed more than 238,000 lives in the U.S.
Tenet reported operating revenues were $3.8 billion in the third quarter ended Sept. 30, down 1.2 percent from the same quarter in 2019.
"We realize and operate every day with the assumption that COVID spikes will be part of what we face until a vaccine becomes widely deployed," said Tenet CEO Ron Rittenmeyer said during an August call with analysts. "We learned how to deal with these spikes and have done so effectively."
Despite patient volume declines, Tenet reported a year to date net loss attributable to common shareholders of $15 million compared with losses of $224 million during the same three quarters of of 2019.
Like its for-profit peers, Tenet's higher profit in the quarter was due in large part to $850 million in federal stimulus grants. Tenet also received $1.5 billion in advanced Medicare payments, which it must repay by April.
Tenet owns 65 hospitals, including six in Southeast Michigan, 520 other care sites and employs 110,000 workers.
Tenet's four remaining MedPost urgent care centers are located in Bloomfield Township, Southfield, Livonia and Rochester Hills. In April, five urgent cares were closed or sold as Tenet dealt with problems related to the COVID-19 pandemic, Bogdanow said.
A knowledgeable health care real estate source, who asked for confidentiality because he is involved in urgent care development, said Tenet also decided to get out of the urgent care business in Southeast Michigan because of less than expected profitability and competition with eight-hospital Beaumont Health.
Beaumont, which is in the process of opening 30 urgent care centers, acquired two MedPost leases in Dearborn and Southgate, a Beaumont official said.
"Tenet is losing money on the urgent cares," said a second source who is knowledgeable about the DMC urgent care strategy. "(Urgent cares) doesn't drive business back to hospitals."
MedPost is one of several outpatient brands owned by United Surgical Partners International Inc., a company partly owned by Tenet.
Bogdanow said Tenet has reached agreement to sell three MedPost locations in Bloomfield, Livonia and Southfield to First Choice Urgent Care. MedPost's Rochester Hills location is expected to close, although there could be a chance it will convert into a physician office or another health care facility, she said.
"We expect all employees in good standing to be offered positions to remain at the facilities upon completion of the sale, which we anticipate occurring in December," Bogdanow said in an email.
Ali Hassan, M.D., First Choice's CEO, said his urgent care chain has increased to six centers: Dearborn, Garden City, Taylor, Bloomfield Township, Livonia and Southfield. He said COVID-19 has put a damper on patient volume and profitability.
"There are many challenges in these difficult times," said Hassan. " Keeping your workforce healthy, finding adequate PPE and even then the cost has gone up 500 percent in some cases. These are certainly very challenging times. This second wave of cases is really stressing the health care system."
Over the past several years, DMC, Henry Ford Health System, Ascension Michigan, Trinity Health Michigan and McLaren Health Care have invested millions of dollars in ambulatory and urgent care services.
In 2018, Southfield-based Beaumont announced it was partnering with Atlanta-based WellStreet Urgent Care to open 30 urgent care centers in Southeast Michigan.
So far, Beaumont has opened 24 urgent cares, including one at Woodward Corners, adjacent to the campus of its main Royal Oak hospital. Other sites include Allen Park, Farmington Hills, Garden City, Grosse Pointe Farms, Macomb, Novi, Shelby Township, St. Clair Shores, Taylor and Woodhaven.
During the next several months, Beaumont plans to open additional urgent care centers Rochester Hills (December), and Orion Township, Chesterfield, Troy and West Bloomfield early next year.
In an email statement, Beaumont said revenue and profitability has exceeded its budget projections.
Since the Affordable Care Act of 2010 expanded primary care, the number of urgent care centers has exploded in Michigan and nationally as patients seek to avoid a steep emergency room bill or to visit more convenient health care settings.
There are more than 350 urgent care or walk-in clinics in Michigan, including more than 45 within 20 miles of Detroit, according to Urgent Care Locations LLC.
Urgent care centers typically provide basic nonemergency services, wellness checks and occupational health services. Nonemergency services that include fevers, coughs, upper respiratory infections and sore throats, along with muscular and bone injuries, can be treated in urgent care settings. Most health insurers in Southeast Michigan contract with urgent centers because of their lower cost compared with emergency rooms.
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