Stung by the troubled Michigan economy, one of metro Detroit's most successful health systems has announced a $60M turnaround plan. The plan, announced this week by Beaumont Hospitals, includes layoffs, pay cuts for doctors and executives, and holds on suburban construction plans.
It also includes a 10 percent pay cut for CEO Ken Matzick, and is designed to take back the system's profitability after this year's projected loss of $22 million on $2 billion in revenues. Matzick says the losses are driven, in part, by a 1.5 percent drop in commercially-insured patients at its facilities as well as growth in lower-paid Medicare business.
To close the financial gap, the plan involves $46 million in savings from hiring freezes and pay cuts, along with putting off capital projects. It hopes to make up the remaining $14 million in the plan with new revenue generated by changes in contracts that squeeze more money out of insurers, including Blue Cross Blue Shield of Michigan.
To learn more about Beaumont's plans:
- read this Detroit Free Press article
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