Ann Arbor – Michigan Medicine one of the state’s leading health systems is planning to furlough and layoff employees and make other cuts in the wake of the Coronavirus pandemic.

In a release, Marschall Runge, M.D., Ph.D., CEO of Michigan Medicine, Dean of the UofM Medical School, and Executive V.P. for Medical Affairs at UofM, wrote as part of phase two of Michigan Medicine’s Economic Recovery Plan that they were projecting a loss of $130 to $230 million in the health system and a projected $80 to $100 million negative variance in the medical school for the current fiscal year. Without action that could continue into 2021.

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Credit: Michigan Medicine – Marschall S. Runge, M.D., Ph.D.

Part of the recovery plan is to achieve a savings of $400 million. To do this, Runge said he would be taking a 20% pay cut, along with senior management taking 5%-15% salary reductions. For all employees, there is a salary freeze with no increases in 2021, including merit pay. A hiring freeze has been enacted.

Michigan Medicine has also identified 300 open positions that will no longer be filled. He wrote that they need to reduce their workforce by 1,400 full-time employees, either by furloughs or layoffs in UofM’s academic medical center. Michigan Medicine employs about 29,000 people.

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In a press release Runge said, “While we don’t take any of these decisions lightly, we believe it is a preferable outcome to broad salary reductions and allows us to preserve as many jobs as possible,” said Runge.

With these pays cuts, construction projects have been canceled as well. Including a 12-story inpatient facility that was revealed in September of 2019.

“While we are faced with continuing challenges as a result of this pandemic, we know that our collective effort will result in our successfully navigating this crisis and moving forward on a path of strength and sustainability,”. He added, “Our economic recovery plan will help us continue to provide hope and healing to our patients and support our clinical, educational, and research missions.”

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