Pay cuts are coming to one of Michiana’s largest employers as Beacon Health System recently announced it is reducing hourly wages for many contracted employees.
In a letter sent to staff last week, Beacon leadership announced the hospital system has instituted a hiring freeze and will begin reducing pay starting in late May. In further cost-saving measures, Beacon is closing its clinic in Edwardsburg as well as its pediatric endocrinology practice.
The announced pay cuts come after Beacon increased its minimum wage and its pay for nurses by up to $17 in the fall of 2021 amid a national nursing shortage. However in 2022, Beacon reported a $14 million loss according to afinancial report from the Indiana Hospital Association.
Beacon didn’t agree to an interview with WVPE, but in a written statement the health system said it can no longer afford to pay elevated wages for nurses and other employees.
Personnel who signed a three-year contract will see their pay reduced by $3 an hour and those who signed a five-year contract will have their wages cut by $7 an hour. In 2021, Beacon reported its base pay for nurses was $33 an hour, but that number rose to around $47 an hour for some nurses who signed contracts in the fall of that year.
Beacon’s said it [quote] “cannot continue to pay those elevated rates and have notified and are meeting one-on-one with the affected clinicians. We are committed to staying competitive and ahead of market average pay for these clinical roles.” [End quote]
Beacon’s website says itemploys more than 8,000people throughout Michiana, though it’s not clear how many or which jobs will see pay cuts.
In addition to the pay decreases, Beacon will close its clinic in Edwardsburg on May 30. The health system will also shutter its pediatric endocrinology services, which were run out of Memorial Hospital, in early July due to “low patient volumes.”
It is unclear whether the cost-saving measures will impact Beacon's announced 10-story patient tower which broke ground in October and will cost an estimated $232 million.
Beacon is not the only health system in Indiana to announce shortfalls in 2022. The Indiana Hospital Association's report says hospitals in the state lost a total of $72 million due to higher costs for staff and medical supplies and fewer people getting elective surgeries.
