Michigan Hospital Halts Construction Amid Pandemic

By Eric Althoff

ANN ARBOR, Mich.—A $920 million, 12-story hospital construction project at the University of Michigan campus in Ann Arbor has been put on hold amid the coronavirus pandemic, with construction workers laid off. According to the Detroit Free Press, the university’s healthcare system, called Michigan Medicine, announced on May 5 that the project was being halted.

In September, Michigan Medicine announced that construction of the state-of-the-art, 690,000-square-foot hospital building was imminent. According to the Free Press, the healthcare facility was due to have facilities dedicated to neurological and neurosurgical care, cardiovascular specialization, as well as areas devoted specifically to advanced imaging. The project was projected to generate 370 on-site construction jobs and 1,600 full-time healthcare jobs when the facility officially opened its doors.

The Free Press reporting indicated that the pause in hospital construction will furlough 1,400 full-time workers and also result in a further hiring freeze. The fiscal impact will also result in a $230 million lost for the 2020 fiscal year and likely extend into Fiscal 2021 as well.

Furthemore, Michigan Medicine executives will also be taking salary cuts as the pandemic worsens for every sector of the economy, including the healthcare industry. Other reductions at Michigan Medicine include voluntary salary reductions for various department chairs.

In a statement released by Michigan Medicine, CEO Marschall Runge said that because of the ongoing pandemic, the company was faced with difficult choices that resulted in the necessity of cutting back on expenses, including on the hospital project at the university campus in Ann Arbor.

“We know that our collective effort will result in our successfully navigating this crisis and moving forward on a path of strength and sustainability,” said Runge, who is also dean of the university’s medical school. “Our economic recovery plan will help us continue to provide hope and healing to our patients and support our clinical, educational and research missions.”

No date for a resumption of the construction of the hospital at the University of Michigan has yet been announced, nor a date for when the furloughed workers can be rehired to continue work on the construction project.

 

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