Wisconsin hospital system announces furloughs after merger talks end

Less than two weeks after announcing a planned merger wouldn’t be happening, the Marshfield Clinic Health System has announced furloughs as a cost-saving measure.

The Marshfield Clinic Health System has announced furloughs affecting about 3% of its staff. (Image: Marshfield Clinic)

The system said it would furlough about 3% of its staff. With a workforce of more than 12,000 workers, that would represent about 360 employees.

Earlier this month, Marshfield Clinic Health System and Essentia Health issued a joint statement saying that they were dropping plans for a merger.

Marshfield Clinic is based in Wisconsin and also serves Michigan’s upper peninsula. The system operates 11 hospitals and scores of other clinics and outpatient locations, along with a health plan serving more than 200,000 people.

In a statement, the health system said the furloughs were affecting those primarily in departments that don’t see patients, including some in leadership roles.

“We are committed to supporting our employees during this challenging time and working collaboratively during their transition to furlough,” Marshfield Clinic said in a statement.

The health system didn’t offer specific details on which departments are affected, or whether clinicians were included in the reductions.

In the statement, Marshfield Clinic cited higher expenses and financial pressures, which many hospitals are facing. Health systems in rural areas also face particular difficulties, which Marshfield Clinic cited in its announcement.

“Providing healthcare in our rural geography comes with challenges and it’s imperative we think differently,” Marshfield Clinic said in the statement. “Managing rising supply and labor costs are key to continuing to meet the needs of our patients across the region.”

“Our health system spans more than 45,000 square miles, and we’re the leading care provider in many of the communities we serve. That makes it vital that we use our staffing resources as efficiently and effectively as possible to make sure resources are used where they are needed most and where they can have the greatest impact on patients.”

​​Essentia and Marshfield announced their initial merger discussions in October 2022. In July, the two systems announced they had reached an agreement to come together.

Essentia Health, based in Minnesota, runs 14 hospitals. Had the two systems merged, they would have created an organization with 25 hospitals.

In announcing that the merger wouldn’t be moving forward, Essentia Health CEO David Herman said in a statement, “Moving ahead, Essentia continues to focus on building innovative partnerships and transforming care for our communities.”

Tony Matt, a spokesman for Essentia, said in a statement to WSAW-TV that financial considerations were a factor in the decision to abandon the merger plans.

“To be clear, Essentia’s finances are strong, and it is imperative we maintain that stability so we can continue investing in and enhancing care for our patients,” Matt said in the statement.

In March 2023, Marshfield Clinic announced that it was laying off more than 300 workers and eliminating an additional 500 vacant positions, WSAW-TV reported. In November 2023, the system also announced cuts in executive pay and the suspension of company matches for 401(k) benefits, WXPR reported.

Healthcare analysts expect to see more hospital mergers in the near future, and some are expected to involve financially struggling organizations that are looking for partners.