LANSING, Mich. — Sparrow Health System announced that it will be laying off several hundred employees due to "a net operating loss of $90 million" in the first six months of 2022.
In a news release, Sparrow said that patient volumes have decreased while expenses have risen "across all categories, including supplies and salaries, wages and benefits."
"In effect, the COVID pandemic may be over clinically but it has caused a financial pandemic for the nation's health care providers," the release said. "As a result, we are implementing staff reductions that impact several hundred roles at the health system."
The release goes on to say that the job cuts are mostly in leadership and non-patient care roles, but Sparrow will eliminating clinical jobs in areas where patient volumes are down and are expected to remain down.
Sparrow says salaries, wages and benefits have increased 35% since 2019 because of labor shortages. The health system is projecting their cost of contracted labor to be $50 million for 2022.
The Michigan Nurses Association said in a statement sent to FOX 47 News that some of the job cuts will affect their organization.
"PECSH-MNA has been informed of hundreds of job cuts being rolled out across Sparrow Health System. Some of these cuts will affect Professional Employee Council of Sparrow Hospital-Michigan Nurses Association (PECSH-MNA), which represents about 2,200 registered nurses and healthcare professionals. Right now, we are in the process of making sure that our contractual protections are followed and advocating for the best result for each of our members," the statement said. "We are also very concerned about the impact that these cuts could have on patient care and our community. We are using the rights we have as a union to try to mitigate the potential consequences to patient safety as much as possible. The situation is evolving, and we hope to learn more soon from Sparrow about how they plan to address the already worsening staffing crisis while laying off caregivers."
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