CHOP taps employees for COVID-19 cost cuts
Children's Hospital of Philadelphia said the moves were needed because of lost revenue caused by the coronoavirus pandemic.
Children’s Hospital of Philadelphia, historically the most profitable nonprofit health-care provider in the region, has not been immune to the financial fallout of the coronavirus.
Citing an anticipated $227 million budget shortfall in the year ended June 30, CHOP is implementing a cost-savings plan that may include reduced hours for some employees, mandatory use of paid time off, and furloughs, a spokesperson said Wednesday.
“Like many of our peers across the nation, Children’s Hospital of Philadelphia (CHOP) has felt the widespread ripple effects of the COVID-19 pandemic, including, but not limited to, drops in patient volume for certain types of care,” spokesperson Emily DiTomo said in an email.
“In light of reduced revenue stemming from these reductions — including the cancellation of elective surgeries and procedures which have since resumed — we are planning for continued uncertainty,” she said.
She said she did not have a figure for how many of CHOP’s 14,000 employees would be affected.
CHOP has not yet released financial results for the fiscal year ended June 30.
In the quarter ended March 31, CHOP’s operating profit margin was a very narrow 0.5%, compared with 5.9% in the same period of 2019. CHOP had $465 million in operating profit on $3 billion in revenue in the year ended June 30, 2019.
CHOP received $42.9 million in federal aid under the CARES Act.
Before COVID-19, CHOP had embarked on a $3.4 billion expansion, with a new, $1.9 billion patient tower in University City as its centerpiece, and a $289 million, 52-bed hospital in King of Prussia. In May, CHOP said that it will continue building the hospital in King of Prussia, but that most other projects were being evaluated.