Government, Health Care, and Human Resources

Health system lays off employees due to Obamacare

December 20, 2013
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Health system lays off employees due to Obamacare
Kalamazoo-based Borgess Medical Center is the flagship hospital of the Borgess Health system. Courtesy Borgess Health

A health care system in the region has confirmed that it is laying off an undisclosed number of employees — due to the implementation of the federal Affordable Care Act.

Kalamazoo-based Borgess Health said in a statement — via Lew Tysman, a Borgess spokesperson — that it would not give out specific layoff numbers by department in an attempt to be considerate to those “adversely impacted” by the decision.

“Communication with all 4,100 Borgess associates is taking place at this time,” Borgess Health said. “Reductions will not eliminate services or change the nearly 125-year-old Borgess commitment to providing patient-center care to southwest Michigan residents.”

Borgess Health did not provide information on severance packages.

Tysman called the layoffs a “transition process that will take several weeks.”

The Borgess Health system spans southwest Michigan: Borgess Medical Center in Kalamazoo; Borgess-Pipp Hospital in Plainwell; Borgess-Lee Memorial Hospital in Dowagiac; Borgess at Woodbridge Hills; Borgess Reverence Home Health & Hospice; Borgess VNA Home Health & Hospice; Borgess Staffing Solutions; Borgess Health & Fitness Center; Borgess Gardens and other owned and affiliated services.

Affordable Care Act

Borgess Health said that the layoffs are the result of the Affordable Care Act’s impact on Medicare payments.

“The impact of Medicare payment reductions related to the implementation of the Affordable Care Act necessitates Borgess to reduce our total associate workforce,” Borgess Health said. “The existing regulator Medicare reductions that span a 10-year period, 2012-2022, are significant and exceed $140M over the 10-year implementation of the ACA. Since 2012, the reductions are about $10 million a year and increase over time."

Health care industry

“Borgess Health is certainly not alone in making this type of workforce reduction during the current major changes in health care locally and nationally,” Borgess’ Tysman said. “You've undoubtedly heard of the Cleveland Clinic and the not-so-massive health systems also making necessary changes.”

Cleveland-based Cleveland Clinic said this fall that it is cutting its annual budget by $330 million and an undisclosed number of jobs, due to Obamacare, according to Reuters.

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