Children's Minnesota eliminating 150 jobs in midst of COVID-19

Children's Minnesota said Wednesday that the nonprofit health system is eliminating 150 jobs to boost efficiency and offset financial losses as patients delay health care during the coronavirus pandemic.

The 150 jobs being eliminated amount to roughly 3% of the workforce, the hospital said. Another 150 open positions will not be filled.

Children's has said the changes are the first step in a long-term reorganization that will improve operations at the state's largest pediatric health system, including changes to its hospital campus in St. Paul.

While executives said St. Paul will have a range of lower-acuity services that children need most often, nurses stress that inpatient services in the east metro are being significantly downsized as a result.

"Like other health care organizations, COVID-19 presented tremendous challenges to Children's Minnesota," the hospital said Wednesday in its statement. "Given the financial impact of decreased volumes, the need to increase operational efficiency and the need to support the organization's redesign efforts in 2021 and beyond, Children's Minnesota has made the difficult decision to permanently reduce staffing levels."

Children's Minnesota operates hospital campuses in Minneapolis and St. Paul, as well as 12 primary-care clinics, six rehabilitation centers, nine specialty-care sites and a surgery center. Overall, the health system last month employed about 5,458 people.

In September, Dr. Marc Gorelick, the system's chief executive, told the Star Tribune that "significant" job cuts would be coming over the next two years at Children's as part of a long-term restructuring.

Gorelick cited factors ranging from lower payment rates from state Medicaid programs to new contracts with health insurers designed to save money. There also had been a reduction, Gorelick said, in procedure volumes during the pandemic.

Gorelick said in September the hospital might shift to Minneapolis the most complex services currently being offered to patients in St. Paul, including units for diabetes, neurosurgery and pediatric intensive care. Children's said in its statement Wednesday there won't be changes to the level of service in the St. Paul hospital's emergency room and neonatal intensive care unit.

"We are contemplating some realignment of the most highly complex services to our Minneapolis campus," the statement said. "The majority of services currently offered at that campus will continue unchanged."

The hospital added that it would "continue and actually enhance" short-stay medical treatment in St. Paul.

But Sydney Pederson, a nurse and union leader on the St. Paul campus, said executives at Children's have been downplaying what the changes mean for the east metro community. Some of the changes with complex services already are underway, Pederson said, adding that nurses understood changes were in store for the St. Paul emergency room.

"It will be a shell of its current self," said Rick Fuentes, a spokesman for the Minnesota Nurses Association, the union that represents hospital nurses. "It's not going to resemble the hospital that we know now."

This spring, hospitals and clinics across Minnesota cut nonemergency services to conserve resources for the COVID-19 pandemic. The subsequent financial shock to Minnesota health care systems included a $10 million operating loss through the first half of the year at Children's, according to a financial statement with bondholders.

In the statement Wednesday, Children's said the positions being eliminated across the health system are in executive, management, clinical and support areas.

Christopher Snowbeck • 612-673-4744