One of Michigan’s largest and busiest health care systems during the coronavirus crisis is announcing layoffs, permanent terminations and other budget cuts due to the "dire financial effects’ of the COVID-19 pandemic.

Beaumont Health announced Tuesday, April 21, it is temporarily laying off 2,475 employees, most of whom are administrative staff and others not directly caring for patients with or without COVID-19.

The Metro Detroit health care system is also permanently eliminating 450 positions, most of which are part of corporate staff or serving in administrative roles.

Beaumont Health CEO John Fox will take a 70% temporary pay cut to his base salary, and the other members of the executive leadership team will take pay cuts of up to 45 percent of their total compensation, the Royal Oak-based hospital system announced.

“I am extremely proud of our team’s rapid response to COVID-19," Fox said in a prepared statement. "While many front-line employees have never been busier, other parts of our operations have drastically declined or ceased. We must make difficult, quick decisions now to protect and readjust to an uncertain future.

"We also expect economic pressures on Beaumont and the health care industry to continue well after the COVID-19 initial surge subsides, which is why we made the difficult decision to eliminate 450 positions. We must adjust the way we operate our organization moving forward. This pandemic has changed the delivery of health care, and we will be treating patients with this virus until we get a vaccine.”

In the first quarter, which ended March 31, Beaumont’s net income was $278.4 million -- a decline of $407.5 million over the same period in 2019. Operating revenue fell to $1.07 billion -- a $78.2 million decrease from the $1.15 billion reported in the first quarter of last year.

Beaumont expects its second quarter financials to be challenging as well.

Related: Michigan health care system launches study testing for coronavirus antibodies

In addition to the position and budget cuts, the health care system said it will pause or cancel some nonessential projects, though it didn’t specify which projects. Beaumont is advocating for federal and state assistance to aid the industry and provide financial relief.

“Through this crisis, we have dramatically changed the way we care for patients. We have seen exponential growth in telehealth, new approaches to staffing and a regional perspective to deploy resources and assets,” Fox said. “We will continue to adapt our health care system to deliver the best, compassionate, extraordinary care every day. Despite an uncertain future, I am confident Beaumont will emerge from this crisis as a strong organization.”

For the last five weeks, nearly all inpatient and outpatient surgeries and non-COVID-19 medical services have been halted at Beaumont’s facilities.

Temporarily laid-off employees can apply for state and federal unemployment benefits through through the Michigan Web Account Manager (MiWAM) at Michigan.gov/miosha or by calling 1-844-967-5747.

While laid off, those employees will continue to receive their health insurance and other benefits at their employee rates, the hospital system announced.. As additional medical services are brought back online, employees could be asked to return to their roles.

Employees who have had their jobs eliminated will receive a lump-sum severance package and will have the option to continue their benefits though the package. They’ll also qualify for unemployment benefits.

Related: Nearly a quarter of Michigan workers have filed for unemployment

Impacted employees will be eligible to apply for other open positions at Beaumont and given priority, according to a Beaumont Health press release.

Beaumont Health employs 38,000 people and has hospitals in Dearborn, Farmington Hills, Grosse Pointe, Royal Oak, Taylor, Trenton, Troy and Wayne in Southeast Michigan.

Earlier this month, Beaumont Health reported 1,500 employees, including 500 nurses, were out sick with COVID-19 symptoms.

As of Monday, April 20, Michigan had 32,000 confirmed cases of COVID-19 and 2,468 deaths of people who tested positive for the virus. Wayne, Oakland, and Macomb counties remain the hardest hit regions in the state.

Other health systems around the state, including Spectrum Health and Mercy Health, have announced layoffs, furloughs and executive pay cuts amid the coronavirus crisis.

CORONAVIRUS PREVENTION TIPS

In addition to washing hands regularly and not touching your face, officials recommend practicing social distancing, assuming anyone may be carrying the virus. Health officials say you should be staying at least 6 feet away from others and working from home, if possible. Carry hand sanitizer with you, and use disinfecting wipes or disinfecting spray cleaners on frequently-touched surfaces in your home ( door handles, faucets, countertops) and when you go into places like stores.

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