Marshfield Clinic Health System furloughing 3% of staff following failed Essentia Health merger

2024-01-16

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Marshfield Clinic Health System furloughing 3% of staff following failed Essentia Health merger

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来源: FierceHealthcare

The furloughs will "largely" impact non-patient-seeing departments, including leadership. The cost-saving measure comes as the rural nonprofit system reports a -5.8% operating margin for the first nine months of 2023.

Less than two weeks after the demise of its merger plans, Marshfield Clinic Health System has shared plans to furlough 3% of its roughly 12,000 employees.

Reportedly disclosed to staff in a Monday email, the furloughs aim to manage labor costs across the 11-hospital organization.

A statement from Marshfield Clinic provided to media on Tuesday confirmed the plan and specified that it will impact those in “largely non-patient-seeing departments, including leadership roles.”

“Managing rising supply and labor costs are key to continuing to meet the needs of our patients across the region,” the system said in its statement. “Our health system spans more than 45,000 square miles, and we’re the leading care provider in many of the communities we serve. That makes it vital that we use our staffing resources as efficiently and effectively as possible to make sure resources are used where they are needed most and where they can have the greatest impact on patients.”

Marshfield Clinic has not said when the furloughs are slated to begin. Fierce Healthcare has reached out to the system for more information on the timing or other aspects of the furloughs.

“We are committed to supporting our employees during this challenging time and working collaboratively during their transition to furlough,” the system said in its statement.

The nonprofit, which often describes itself as one of the largest rural integrated systems in the country, operates throughout Wisconsin and in parts of Michigan. Its operations include a health plan, research and education programs and more than 65 clinical locations.

Marshfield Clinic’s salaries, contract labor and benefits expenses were down nearly 4% across the nine months ended Sept. 30, 2023, as compared to the same period a year prior, according to its most recent quarterly financial filings.

However, the roughly $3 billion organization’s operations have lost $133.5 million (-5.8% operating margin) during the first three frames of 2023 and follow full-year operating losses of $367.9 million in 2022 and $60.2 million in 2021.

Also of note is the timing of the decision to furlough employees. Earlier this month Marshfield Clinic announced that its deal to merge and form a 25-hospital system with fellow nonprofit Essentia Health — whose operations and bottom line were both in the black across its fiscal 2023 — would not come to pass.

Those merger plans were first announced in October 2022 and now stand as Marshfield Clinic’s second unfulfilled combination in four years. Leadership from Marshfield Clinic and Essentia Health said in this month’s announcement that the decision to stay separated was mutual.

"As we now move our separate ways, Marshfield Clinic looks forward to advancing our 100-year legacy of providing compassionate and accessible care to the communities we serve," Marshfield Clinic Interim CEO Brian Hoerneman, M.D., said in a statement addressing the nixed merger.

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机构

Marshfield Clinic, Inc.