With losses of $163M in 6 months, Fairview to eliminate 900 jobs, make hospital changes

With losses of $163M in 6 months, Fairview to eliminate 900 jobs, make hospital changes Photo: KSTP-TV.

Rebecca Omastiak
Updated: October 05, 2020 11:01 PM
Created: October 05, 2020 12:23 PM

Monday, Fairview Health Services announced it is making significant changes systemwide due to losses sustained this year.

According to a statement from Fairview President and CEO James Hereford, the health care system saw losses of $163 million in the first six months of 2020.

Although Hereford said those losses were primarily the result of "the unprecedented health threat of COVID-19," the virus "further exposed the profound challenges we face and the unsustainable economics of healthcare today."

As a result, approximately 900 positions systemwide will be eliminated by the end of the year. Meanwhile, two hospitals are undergoing significant changes and 14 primary care clinics in Minnesota, as well as two in Wisconsin, will be consolidated into other locations by the beginning of December.

The health care system announced the following organizational changes:

Hospital and clinic changes

Ramsey County officials are planning to address a lease agreement with Bethesda Hospital this week. Through that partnership, Bethesda will be repurposed as a facility to address homelessness in St. Paul. Meanwhile, Fairview's cohorted COVID-19 care will move from Bethesda Hospital to the St. Joseph Hospital's campus by the middle of the month.

St. Joseph Hospital, meanwhile, will be "reimagined as a community hub for health and wellness," according to Fairview. By the end of this year, most hospital and clinical services offered through St. Joseph's will be transferred to other sites within the Fairview system. Additionally, emergency department services at St. Joseph's will be discontinued starting Dec. 31. Inpatient mental health services will continue through 2021, and long-term acute care services will continue through St. Joseph's. Fairview's cohorted COVID-19 care will move to St. Joseph's.

Services being transitioned from St. Joseph's to other system locations include: heart and vascular, musculoskeletal, podiatry, neurology, neurosurgery, general surgery, bariatric, urology, thoracic surgery and trauma, ENT, G.I. procedures, oncology and pulmonary services.

At Southdale Hospital, the inpatient mental health unit will close as two new floors will be added. Those floors will consist of 52 single-occupancy rooms. 

At the University of Minnesota Medical Center, there will be 48 beds added on the West Bank portion of the center, and services will be transferred between the East and West Bank parts of the clinic "to achieve single occupancy throughout the system." That is expected to be completed in 2022.

Sites that will see a transfer of services include St. John's Hospital, Woodwinds Health Campus, University of Minnesota Medical Center, Southdale Hospital and Maplewood Clinics and Surgery Center.

In terms of the impact on existing patients, Fairview officials stated they will receive instructions on next steps for their care from their individual care teams, beginning in November. Additional information can also be found here and here.

Ambulatory changes and 'health hubs'

Fairview announced it is re-evaluating its ambulatory care model that focuses on "health hubs" as part of upcoming changes. As that care model changes, Fairview states 16 total primary care clinics in Minnesota and Wisconsin will be consolidated.

Those sites that will be consolidated by Dec. 4 in Minnesota are:

  • Bloomington Lake Xerxes,
  • Columbia Heights,
  • Downtown St. Paul,
  • Farmington,
  • Grand Avenue St. Paul,
  • Hugo (HealthEast),
  • Hiawatha,
  • Integrated Primary Care,
  • Lino Lakes,
  • Milaca,
  • Pine City,
  • Roseville,
  • Savage,
  • Zimmerman.

The Wisconsin locations that will be consolidated are:

  • Ellsworth,
  • Spring Valley.

Job cuts

Fairview announced the 900 systemwide positions it plans to cut are expected to take place by the end of this year. According to Fairview, that amounts to just less than 3% of the Fairview workforce.

Those whose positions are being cut will "be supported with a paid notice period, generous severance benefit, dollars toward benefit continuation, and career transition services," Fairview stated. Additionally, those workers will have the opportunity to transition into open roles within the system, wherever possible. Currently, Fairview reports there are 1,200 clinical and non-clinical available positions.

Pharmacy changes

As part of the announcement Monday, Fairview announced six of its pharmacies will close by Dec. 1. Those are the Columbia Heights, Hiawatha, Lino Lakes, Milaca, Rush City and Zimmerman pharmacies.

Moving forward

Hereford said while these decisions "are among the hardest decisions an organization must make," they are "critical" to the system's future.

"While we must address our financial challenges, ultimately this is about ensuring our future as a thriving and innovative health system; one dedicated to helping and healing patients," Hereford said in a statement. "To improve health outcomes and experience for our patients, we must be willing to do things differently."

Stay with 5 EYEWITNESS NEWS and KSTP.com for updates on this developing news.

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