Mercy Health and Saint Joseph Mercy Health System, which together comprise Trinity Health Michigan, today announced that it will adjust staffing levels and other direct expenses to address decreased revenues caused by the COVID-19 pandemic and ensure that the health system can serve its communities in the long term.
“Our mission is to be a transforming and healing presence in our communities, and we are making painful but necessary decisions to ensure that we can sustain our organization into the future,” said Robert Casalou, president and chief executive officer, Trinity Health Michigan.
“Like most health systems and other industries across the country, we are facing significant pandemic-related challenges. As we ramped up to support inpatients afflicted with COVID-19 and effectively shut down outpatient and elective services during stay-at-home orders, our revenues fell and operational costs increased. While we have received funding from the CARES Act that has helped cover our operating deficits for a few months, it is not enough to sustain us into the future.”
Though there are positive signs that patients are returning for services, the organization expects the recovery will be gradual, and there are many unknowns, with possible resurgence of the virus and the country’s economic recovery.
“We are seeing gradual rates of patient volume increase but expect our revenue will be lower than previous levels for at least a few years. In order to align our cost structure with volumes, we are making difficult and painful decisions that impact our colleagues,” said Casalou. “We are a healing ministry of people caring for people, and we will do our best to support our colleagues facing transitions.”
In the first quarter of fiscal year 2021, which begins July 1, Mercy Health and St. Joe’s will reduce positions in mostly non-clinical, administrative functions. Some of the affected colleagues will be among those who were furloughed over the past few months. Some staffing decisions will be position eliminations, and others will consist of extended furloughs or reduced schedules. All colleagues whose positions are eliminated will be eligible for a paid notice period, severance pay and health and other benefits through their severance period.
Since March 2020, Mercy Health and St. Joe’s has invested significantly in supplies, equipment, pharmaceuticals, staffing and other needs to ensure colleague and patient safety to address the pandemic. During this time, Mercy Health and St. Joe’s has also taken several actions to manage expenses through temporary closure of under-utilized services, colleague furloughs and reduced schedules and executive leader compensation reductions.
“We must now focus on what is required to restructure our organization and redesign our services to meet the needs of our patients in the coming months as we continue to live with the presence of COVID-19,” said Casalou. “I am confident that Mercy Health and St. Joe’s will emerge from this challenging time as a strong organization. We have a new strategic plan that will enable us to grow existing and new services. We remain committed to our Mission and Core Values, and we will persevere to fulfill the essential health needs of the communities we serve.”