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Marshall, MI – March 4, 2022 – Oaklawn Hospital announced today it will shift care delivery priorities to best serve patients now and into the future. That shift will include closure of several outpatient services in response to unsustainable profit erosion caused by pandemic impacts such as the influx of high acuity patients requiring a higher level of care, lost revenue due to patients postponing or foregoing elective care and the persisting healthcare worker shortage.
Oaklawn, like hundreds of other hospitals, has experienced negative profit margins over the past couple of years. The changes were announced following the March 4 meeting of Oaklawn’s Board of Directors after the members accepted leadership’s recommendations to close Oaklawn Home Care, Oaklawn Home Medical Equipment, and the Oaklawn Medical Group practice in Homer as part of a broader plan to shift care delivery priorities. Phase out of the home care and medical equipment services would begin on April 1 with final closure dates of June 30, 2022. It is anticipated the providers currently seeing patients in Homer will relocate to nearby practices and continue to serve patients at those locations.
Higher acuity and rising costs can essentially push service line profits below the break-even margin, especially for smaller volume providers. Hospital leaders across the country are now at a crossroads where they can no longer put off long-term growth strategies and must make difficult operational decisions such as closing unprofitable services.
“This decision was not made lightly and is part of a broader Oaklawn plan to shift care delivery priorities, mitigate costs and increase efficiencies,” said Gregg Beeg, Oaklawn Hospital’s president and CEO. “The healthcare industry is facing unprecedented higher costs related to supplies, equipment, and vendor services, as well as significantly higher labor expenses. What we do today to ensure our long-term viability will help ensure Oaklawn can continue to meet community needs now and into the future.”
Beeg added, “The financial losses of the past two years are simply not sustainable, and we must remain focused on our continued ability to deliver high quality crucial services to our community. Other efforts to offset financial losses and increase healthcare delivery efficiencies include operational changes in the hospital’s behavioral healh unit to align with current census trends and moving forward on long-term growth strategies such as the expansion of primary care and specialty services in other markets which serve to grow a broader referral base. Those strategies are important for achieving Oaklawn Hospital’s growth goals as well as the goals of Oaklawn providers.”
Oaklawn recently launched an employee retention bonus program to address rising recruitment costs for hard-to-recruit positions and used that incentive program to express appreciation for the loyalty and commitment of its team members. Additionally, improved efficiencies are just one component of our continual commitment to focus on providing high quality care to the communities Oaklawn serves.
All patients will receive written notification of closures and Oaklawn care providers are working to help patients smoothly transition their care, prescriptions, and medical records. Oaklawn will also be working closely with approximately staff members on re-assignments within other departments where possible.