Saturday, June 1, 2013

Medical Layoffs

Back when we first arrived here in the United States, hospitals did not advertise, merge or acquire one another, or had layoffs. St. John, the nearest substantial hospital to us, was then under construction and opened its doors the year after, in 1952. It was founded by the Sisters of St. Joseph, who had their own start on these shores in 1889—but whose origins as an order date back to France and 1650. Things change, as they say. Later, much later, St. John, a by-now expanded health system, became part of Ascension Health, the largest Catholic non-profit organization in the United States. It is now St. John Providence Health System. By that time, what with the competition, don’t you know, St. John was already advertising itself. So do virtually all the major systems in this city: the whole ball of wax: billboards, videos, print. Therefore advertising, check. Mergers and acquisitions, check. The latest checkmark came last week: yes. Layoffs. The reasons for this are multiple.

For one, there has been a shift from inpatient to outpatient care, not just within the St. John’s system but across the board, affecting all hospitals. All those rooms, all those beds: neglected. The outpatient services, very crowded. Why this change? Money, no doubt. Ever more people who need to stay in the hospital are, instead, homeward bound on self-propelled stretchers, on crutches, or never even bothered to have that necessary operation because they had been laid off. Add to this escalating costs, not least barely compensated emergency room services, the sequester, and so on. Cost are going through the roof.

One of the St. John billboards is prominently located at Mack and Moross, about a block from the St. John, the flagship. We see it all the time. Others are located at much more densely travelled traffic lanes like Interstate 94—competing there with the Ford System’s and Beaumont’s proud towers in the sky. I got to thinking about that. 1951—no advertising. So what does a billboard cost—never mind several. I did a little looking. Billboards are in the range of 14 by 48 feet in size. They are populated by panels, so-called, measuring 14 by 4 feet. So it takes 12 panels for each. Minimum costs per panel, for four weeks, are around $1,500 dollars. In the Detroit metro area, pricing for high-traffic areas begins at around $2,800 per panel. So the range here is, for one billboard, from $18,000 to $33,600 for a four-week period. To be sure, not all billboards are full size—and some are larger. Costs may be less for some, significantly higher for the big ones. Still, if one billboard can cost a hospital minimally $216,000 (suburb) or $403,200 a year (freeway)—and several are used—and if you add the cost of preparing a handful of promotional videos, with actors, music, writing, and all that, and sprinkle in some print promotion too—it would not surprise me that a system like St. John Providence has an advertising budget of at least a million a year.

The system is now going to lay off 160 people—and the local media add: “probably only for starters.” If we assume an average saving per discharged employee of $40,000 (which is a very low guesstimate), the savings will be $6.4 million. Therefore X-ing out the ad budget would not produce anything like the gains promised by layoffs. Therefore the show goes on: endless new mergers (presumably saving on overhead), advertising (to attract people to underused facilities) and layoffs to lower costs. And after us, the deluge. It pains me to see all this high-tech progress rapidly evolving to bring what? The witch-doctor back?

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