Marquette General Hospital announced on Wednesday that they would implement cost saving measures which include laying off 21 people, freezing wages, and requiring some employees to take unpaid time off.
Hospital officials expect to save about $4.5 million with the changes.
"We started this process during the past fiscal year by offering a voluntary early-retirement plan that roughly 50 employees accepted," said MGH Chief Financial Officer Jerry Worden. "In addition, we made a major change from a defined benefit pension plan to an employee investment participation (401K) program. "
Worden added that these changes are MGH's way of adapting to the realities of a changing medical care delivery environment.
As part of these changes, MGH plans to eliminate 21 staff positions, most of which are management. There is also a planned wage freeze, and managers are being required to schedule 10 unpaid days off by June 30. All of these changes will be implemented in the coming weeks, but there might be a call for more cuts in the future, say officials.
"These are our initial restructuring steps," Worden added. "We may increase the intensity of the savings initiative based on how the remainder of our fiscal year plays out in terms of patient volume and revenue."
MGH officials point out an increase in out-of-state campaigns to get patients from the Upper Peninsula.
"We must restructure to best meet the needs of our patients in a new world that emphasizes outpatient medicine," said MGH President and CEO A. Gary Muller. "However, what the people of the U.P. have to come to recognize is that when they travel out of state for healthcare, they are not just taking MGH market share with them, but also their neighbor's job."
Muller added that this outmigration of patients is also driving up healthcare insurance premiums for both employers and their employees.
Marquette General Hospital plans to periodically provide the community with updates on the progress and effectiveness of the cost saving measures.