BOZEMAN — Bozeman Health Deaconess announced Tuesday afternoon that 28 leadership and leadership support staff positions will be eliminated and 25 open positions will not be filled at this time.
Citing the COVID-19 pandemic, economic uncertainty and labor shortages as reasons for the reduction in force, the employees were notified in one-on-one meetings on Tuesday, Aug. 2, 2022.
The announcement was made to staff in a letter from Bozeman Health's CEO John Hill.
Bozeman Health provided the following statement:
“The COVID-19 pandemic, economic uncertainty, and labor shortages have impacted our revenue and operations. In order to sustain the mission of our health system and to ensure the health and wellbeing of the ever-evolving needs of our community, a difficult decision was made to eliminate 28 leadership and leadership support staff positions, out of our workforce of nearly 2,400. We will also not be filling 25 open positions, which means a total of 53 FTE positions are being impacted. This was, unfortunately, necessary to ensure we can sustainably deliver care in the future. We care deeply for our colleagues who have been impacted and we're doing everything we possibly can to help them and their families during this transitional phase.
Looking forward, we will continue to invest in areas like patient experience, new infrastructure, technology, and workforce housing, as these investments will help meet the needs of our community and preserve even more jobs in the future. We are grateful to our team members and our community who have put their trust in us for 111 years, and we look forward to continuing to serve Southwest Montana for the next century.”
The memo issued by Hill was also provided:
Dear Bozeman Health colleagues,
Today, I have very difficult news to share with you. As you know and as we’ve discussed for some time, the healthcare industry is facing an unprecedented financial crisis. A global pandemic, national labor shortages, political and economic uncertainty, and inflationary pressure are all impacting revenue and operations. How healthcare is delivered has fundamentally changed forever. Every health system across the country is grappling with the question of how to best serve patients, their employees and community. These changes will have profound implications for the future of healthcare and for Bozeman Health.
Because of this, we have made the difficult decision to reduce the size of our workforce, resulting in 28 leaders and leadership support staff leaving today. We are also holding on filling 25 open leadership positions, which means a total of 53 positions are being impacted.
This morning in 1:1 meetings, these team members were notified that their position had been eliminated. I have chosen to write to you after each of them has had the chance to receive the information privately and process it in their own time. I ask that you respect this time for them and their loved ones.
For a health system like ours, whose mission and values are centered around our community and caring for others, today is especially hard to confront. This was not a decision that we took lightly. We understand the personal and professional impact this will have on those affected, and we remain grateful for their dedication and contributions to our patients, to each other, and to the communities we serve.
It’s important to me that I share with you how we arrived at this decision, what we are doing for those leaving, and the continued work to sustain our organization in the long term.
A difficult decision
I want to be clear that each person leaving us today is a very talented, high performer who has been invaluable to Bozeman Health. They are leaving today due to no fault of their own, which is also what makes this so difficult. Their role was eliminated because, after significant review, it no longer aligns with how we will sustainably deliver care moving forward. I can confidently say that they are among the most capable, accomplished and kind-hearted colleagues I’ve ever worked with.
Each reduction was made solely through the lens of our unwavering commitment to providing quality patient care at the bedside, and ensuring we can continue to do so while reducing the cost of providing care. We carefully prioritized being transparent and forthcoming about our decisions as soon as they were finalized, out of an abundance of respect for each impacted individual, their relationships, and their families. We were also able to minimize the impact on our team members today by evaluating our 25 open leadership positions. We have decided not to fill those positions, which will provide us additional time to properly assess the needs of our teams.
While we know Bozeman Health will recover from economic downturns and any near-term changes, becoming more efficient in how we operate will remain permanent.
This year alone, our costs have surpassed our revenue by 8%. This means we have lost $14.8 million in the first six months of 2022 or approximately $2.5 million per month. While we are a non-profit and large margins are never our highest priority, this amount of loss is not sustainable over time. Understanding the continued challenge of rising costs, this past year we proactively took a number of cost-saving measures while maintaining a high level of productivity and quality of care. Prior to the decision to reduce staff, we implemented cuts to executive compensation, reduced contract labor, paused on certain provider bonuses and all leadership performance bonuses, stopped all travel and discretionary spending, initiated a hiring freeze for non-essential leadership positions, and put a hold on consulting agreements, to name a few.
These measures are helping us significantly curb costs and we will need to stay the course. But even with these proactive changes, reducing our staff was required.
In my 30-year career, this was the most difficult decision I’ve made, and it was also the most necessary.
Our business is personal
I’ve been part of this community for six years. I’ve not only worked alongside you, but I’ve dined with you, enjoyed community events and festivals with you and your families. I’ve enjoyed outdoor activities with you, and I’ve talked with you about family, friends, and loved ones after a long day’s work. And during good times and bad, I’ve laughed and cried with you. Montana, as the saying goes, is one big small town with really long streets. I know that these changes are felt deeply and personally by each of us, on every street and household.
Our health system began 111 years ago to provide compassionate care for this community and we continue with that vision. Recent crises have only sharpened our focus on delivering life-saving care in the most effective, compassionate, and personal way possible.
Over the coming weeks and months, I ask each of you to further extend that personal sense of compassion to each other, especially to those leaving us today. I’ve asked my leadership colleagues to do everything possible to ensure our affected leaders and their families are set up for future success and we are doing everything we can to ensure the stability and wellness of our affected employees and their families. Our impacted leaders and leadership support staff leaving will receive a severance package of up to six months of pay, access to extended health insurance, mental health and EAP support, unemployment pay, career placement services, and letters of recommendation. If qualified, these individuals are also encouraged to apply to any of our open, patient-facing positions, and will be expedited through the recruitment process.
My sincere hope is that this time brings us all renewed clarity of what is truly important. Our community, our patients, and our colleagues need us to thrive. They are counting on us to do what we do better than anyone else by providing compassionate care in the most thoughtful, efficient, and innovative manner possible.
To achieve greater efficiencies, we are analyzing the need to sunset non-core programs and consolidate some services. For instance, we are closing our 19th Street lab and pausing our Belgrade Clinic lab. These services will be consolidated at our Deaconess location. Our patients will receive information about how to access these services in the future.
While a hiring freeze has been imposed on non-essential leadership positions, we have not slowed down on our recruitment efforts for patient critical positions. In the past three months, we have hired and onboarded 248 employees and there are open positions available across patient care services. We are committed to filling these roles and will continue to prioritize our hiring efforts to provide the best care for our community.
Our investments in areas such as workforce housing, new infrastructure, technology, and patient services will continue. Forward-thinking investments like these directly benefit the evolving needs in our community and preserve even more jobs. You will continue to see construction and progress as these critical projects come to fruition.
Even with this strategic focus, we all must commit to becoming leaner in how we deliver care in the post-pandemic economy — one where consumers have more of a choice in their healthcare decisions than ever before.
I am proud of how our nearly 2,400 team members pull together in difficult times. I have no doubt we will rise again to the occasion, with each of our colleagues sharing in the sacred trust and responsibility placed in us by the resilient communities we serve in Southwest Montana.
An email was the quickest way for me to address you all today, and an all-staff meeting has been scheduled on Wednesday, Aug. 3 at 10 a.m. so that I can address your questions. We will also post a recording of this meeting on our Intranet. For leaders and managers, there will be meetings this afternoon for you to connect with your executive leader.
While my heart is heavy, I want to thank you. Thank you for your steadfast commitment to improving community health and quality of life for our patients and each other. Each of us has great strength, we are also human. If you need to speak with an HR business partner or our spiritual health team, I encourage you to do so.
Thank you for choosing to share your time and talents with our community, your colleagues, and with me. I am grateful.
All my best,
President and CEO
This is a developing story and will be updated if more information becomes available.