Ascension Health in Michigan is nearly complete with its employee layoffs and management restructuring as it has laid off 500 workers, including 20 executives or managers, at its 14 hospitals in Michigan.

Gwen MacKenzie, Michigan market executive of Ascension Michigan, said in an exclusive interview last Thursday with Crain's that the layoffs cover a wide range of job categories: nurses, medical therapists, technicians, unit clerks and other support service employees.

"We have transitioned close to 500 associates. Every one of those has been painful and hurtful," said MacKenzie, a former oncology nurse who has headed up Ascension Michigan since 2014. "You probably wonder why we were not talking more openly about it. It is very private and sensitive matter that we take very seriously on behalf of our associates."

Ascension Michigan employs about 26,000 people, and the layoffs so far are a little more than 2 percent of the workforce.

But MacKenzie said more layoffs are expected after Ascension completes employee-to-patient ratio reviews and notifies the Catholic health system's 25 collective bargaining units, which account for 22 percent of its workforce, or 5,800 workers. Further layoffs of those unionized employees could take several months to complete, she said. "We don't expect a large number" of more layoffs, she said.

Over the past three weeks, Crain's has reported hundreds of layoffs at Ascension hospitals in Michigan. Sources suggested layoffs could eventually total this year up to 1,000, which could include moving several hundred employees into a contract management company. MacKenzie did not specify a final number because of the ongoing reviews and labor talks.

"We think this is our new normal. The landscape we are navigating here is the new reality," said MacKenzie, who worked as a nurse practitioner and administrator at Detroit Medical Center for 25 years until 2005 when she became CEO of Sarasota (Fla.) Memorial Hospital.

"We are the largest system in the U.S. and try to be transformational and ahead of changes," she said. "We make adjustments as fast as we can, but as a Catholic ministry we need to be sensitive to vulnerable populations."

With burdensome regulations getting worse and growing reimbursement cuts from government and private payers facing Ascension and all health systems, MacKenzie said, Ascension needs to reduce costs and reorganize to prepare for patients seeking lower-cost health care options.

"We believe all health systems (will need to cut expenses and reorganize). We may be a leader as all health systems go through the same rapidly changing landscape with reimbursement decline, people transitioning to outpatient (services)," she said. "We are focusing on ambulatory growth. ... Health care costs are a major issue and we are addressing that now."