Marshfield Clinic To Lay Off Furloughed Workers

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Dive Brief:

• In May, Marshfield Clinic Health System will lay off workers it furloughed earlier this year, a spokesperson confirmed to Healthcare Dive on Thursday. 
• The Wisconsin-based nonprofit furloughed about 3% of its employees in January, largely in non-patient-seeing positions, in a bid to manage rising labor costs. With about 12,000 employees, according to Marshfield’s website, the cuts would likely affect around 300 people.
• Since January, more than 60 furloughed employees have been offered other jobs within the health system, the spokesperson said. Workers affected by May’s layoffs will receive severance and can apply to other roles at Marshfield “in areas with specific needs.”

Dive Insight:

The layoffs come as the 11-hospital system struggles financially. Marshfield posted a $133.5 million operating loss during the nine months ended Sept. 30, increasing from a $92.6 million loss in the prior-year period. 

Fitch Ratings also downgraded Marshfield’s rating outlook to negative in January. The credit ratings agency noted the provider’s performance had improved in 2023 compared with the previous year, but margins were still “considerably compressed” as the system relied on contract labor and managed wage and inflation pressures.

S&P Global Ratings also lowered its rating for the health system last month, noting “heightened and ongoing” operating losses and a challenging debt structure that might need to be restructured soon.

The system has made moves to trim expenses, like cutting executive pay and shutting down an art gallery at one of its medical centers. In February, Marshfield closed its Park Falls Home Health and Hospice facility due to “limited resources.” 

The system also notched a $10 million line of credit, according to a February financial filing. 

Like other financially strained hospitals, Marshfield attempted to merge with another operator, signing an agreement last summer to combine with Duluth, Minnesota-based Essentia Health. But the deal didn’t close as expected at the end of 2023. In January, the systems said the merger was “not the right path forward” for the organizations. In S&P’s note last month, the ratings agency said Marshfield was “actively in pursuit” in finding a new partner.

Other health systems have recently cut jobs in non-patient-facing positions, including Kaiser Permanente, Novant Health and Mass General Brigham.