North Memorial Health Care is cutting staff, overhauling its organizational structure and making plans for a significant downsizing of its struggling North Memorial hospital.
In a memo sent Thursday and obtained by the Star Tribune, North Memorial CEO Larry Taylor expressed a sense of urgency in changes he said would make the organization competitive in the new health care environment.
"We cannot wait weeks or months to make these changes," Taylor wrote. "We must be prepared to perform as a realigned health care system in early 2013."
The vision includes shifting resources away from North Memorial Medical Center in Robbinsdale, currently a level one trauma center, and building three new clinics to increase market share and strengthen its referral base, according to recent financial filings.
The organization also will develop "new core competencies" in geriatric care, end of life care and population health management, Taylor said.
In addition to its namesake hospital, North Memorial Health Care has a 75 percent stake in Maple Grove Hospital, operates about a dozen clinics and runs one of the nation's largest medical transport fleets of helicopters and ambulances.
It is the smallest health care system in the Twin Cities, with revenue of $670.4 million in 2011.
North Memorial hospital will feel the brunt of the changes after facing what Taylor called a "significant drop" in projections for inpatient volume in 2013.
Admissions at North Memorial were almost 9 percent below budget for the third quarter; Maple Grove was 3.7 percent under. Profits systemwide were $1.1 million in the third quarter, below the budgeted $3.3 million, according to financial filings.
The overhaul will "realign and resize" the 518-bed North Memorial hospital, which Taylor projected to be "more the size of a suburban hospital" compared with the Twin Cities' other major trauma centers: Regions Hospital in St. Paul (454 beds), Hennepin County Medical Center (894 beds) and Abbott Northwestern (952 beds), both in Minneapolis.
Taylor announced "major changes" to leadership positions, including layoffs, but it is unknown how many jobs are being cut. Additional "non-leadership staffing reductions" will be announced in mid-January involving jobs not based on patient volumes.
Positions related to patient care "will be evaluated quarterly, and staffing reduced as we see how actual volumes compare to the volume reductions we are projecting," he said.
No nurse layoffs - yet
The Minnesota Nurses Association, which includes those at North Memorial, has not received a two-week notice that would be required before layoffs. Nurses on Thursday approved a contract calling for a 4.5 percent pay raise spread over three years.
A North Memorial spokeswoman declined to make an official available for an interview, and Taylor did not respond to an e-mail.
In a statement, the organization said: "This week North Memorial Health Care made leadership changes, creating an organizational structure that addresses the dynamic landscape of our health care environment and positions us to continue to provide remarkable care to our patients."
Staff writer Patrick Kennedy contributed to this report. Jackie Crosby • 612-673-7335