Beaumont Health plans to downsize Beaumont Wayne by 86 beds, transfer 10 of those beds to its Beaumont Troy hospital, 22 to its main campus in Royal Oak and delicense the remaining 54 beds on June 30, according to an internal Beaumont email obtained by Crain’s Detroit Business.
The moves will have a small impact on staffing at Wayne but will save Southfield, Mich.-based Beaumont an unspecified amount of money and most likely will lead to higher revenue at the Troy and Royal Oak hospitals because it will be able to admit an increased number of patients over time, two healthcare experts told Crain’s.
“(Beaumont) will absolutely (generate) higher revenue and get a higher number of admissions at Troy and Royal Oak (by transferring beds from Wayne). It helps them,” said one expert familiar with the hospital market in Southeast Michigan who asked to remain anonymous. ” The key (for Beaumont) will be for, say, every 10 appendectomies, five will be Blue Cross at Troy and two at Wayne. Blue Cross pays Beaumont two to two and a half times more than Medicare.”
“During a recent review, we validated that the average licensed inpatient bed utilization at Beaumont Wayne for the last six years has never exceeded 88 beds, although our licensed beds remained at the historical level of 185,” said Tammy Scarborough, Beaumont’s president of Taylor, Trenton and Wayne in the June 22 email sent to Beaumont staff.
“At our busiest times we have had an average daily census of inpatients of less than 50 percent of our capacity (of 185 beds). Additionally, healthcare trends have shifted toward outpatient care, while our current licensed bed capacity has not been updated has that shift has occurred,” said the email.
“To capture savings for Beaumont Wayne and alight actual utilization with licensed beds, we will reduce to 99 licensed beds on Tuesday, June 30,” Scarborough said.
Beaumont said the bed reduction will have a small impact on hospital staffing at Wayne because the numbers of employees are based on actual patient volume. “Beaumont will be able to transfer beds back to Wayne from within our system or apply for additional beds should our site achieve extraordinary growth,” Scarborough said.
On April 15, Beaumont temporarily closed its Wayne hospital for three weeks after it was completely converted to a COVID-19 only facility.
In a press release Tuesday morning, Beaumont said it has fully reopened Wayne. Services now available include the following: level three trauma services, obstetrical services, observation and inpatient medical surgical beds, outpatient surgery, diagnostic and support services that includes pharmacy, laboratory, food services and environmental services.
“The Beaumont, Wayne team has been working diligently to provide diagnostic and treatment services for the Wayne community and surrounding areas. We remain committed to providing safe care for both COVID-19 and non-COVID-19 patients,” said Carolyn Wilson, Beaumont COO, in a statement. “Over the past few weeks, we have seen many of our patients return to Wayne for care and we’re thrilled the local community is supporting the campus.”
Since mid-March, health systems have been hammered by declining revenue from elective surgeries and other procedures that were delayed for safety reasons during the coronavirus pandemic. the past month hospitals have been ramping up services.
“We are committed to keeping our Wayne hospital open as the community knows it today and to supporting future reinvestment in the hospital. The reduction in licensed beds has nothing to do with our commitment to Wayne. It is part of an annual review across Beaumont,” Wilson said. “Beaumont, Wayne is important to our health system and the communities we serve. Reducing the number of beds will allow us to preserve the current services we offer without compromising care.”
Scarborough said Beaumont previously reduced licensed beds at Wayne in 2016 and also recently at Beaumont Taylor. Crain’s was unable to verify how many beds were transferred by Beaumont.
“Beaumont’s acute care campuses in Dearborn, Farmington Hills, Royal Oak and Troy were reclassified in the past, allowing us to take advantages of adjustments to Medicare prospective payment rates for inpatient services intended to compensate hospitals for certain patient care costs, such as those related to teaching activities,” Scarborough said.
It is unclear whether Beaumont is paid higher commercial payer rates for at its Troy and Royal Oak hospitals than at Wayne. But Medicare and Medicaid rates are the same regardless of the location within Southeast Michigan.
A second healthcare expert, who also asked to remain anonymous, said Beaumont likely will receive greater revenue from commercial payers at Troy and Royal Oak than it would have received at Wayne even if Wayne were able to admit greater patient volumes.
“Having Beaumont’s licensed beds aligned properly with actual volumes will improve the financial stability of the hospital and the system following the trying time of the pandemic and will not affect the level of service provided at the Wayne campus,” Scarborough said in the email.
“The additional funds generated will help support future reinvestment in the facility and allow for a larger number of patients to have private rooms at Beaumont Wayne,” the email said. “We are now focused on strategic planning to ensure we have a multi year plan for growth and the improvement of services.
“Beaumont reduces bed count by 86 at one hospital, transfers some to other facilities” originally appeared in Crain’s Detroit Business.