Philly-area hospitals furlough employees as coronavirus prep depletes revenue

Layoffs are surging nationally to unprecedented numbers, and even workers in the health-care industry — especially those who don’t provide clinical care — are not immune as the COVID-19 pandemic upends the medical system.

Among the nonclinical workers at risk are those at Trinity Health’s Mid-Atlantic System, which operates five hospitals in the Pennsylvania suburbs and has announced an intention to furlough staff. Shore Medical Center in Somers Point, N.J., asked nonclinical workers to volunteer for layoffs. Bayada Home Health Care of Moorestown, N.J., is temporarily furloughing 3% of its work force, all of it people in administrative and managerial roles, even as it seeks to hire clinical-care personnel, a spokesperson said.

Others involved in non-emergency patient care are being asked to dip into their vacation time rather than come to work, or are being scheduled for fewer hours — meaning smaller paychecks.

So many non-emergency procedures and surgeries have been placed on hold to prepare for the expected surge in COVID-19 patients, hospital systems don’t need the workforce they required just weeks ago, and they don’t have the revenue. So the hospitals are sending layoff and furlough notices to staff that normally would be kept busy.

“North of 50% of the work they do and the payment they get from insurance companies and government is supporting work that they’ve canceled,” said Andy Carter, president and chief executive of the Hospital and Healthsystem Association of Pennsylvania.

Across the state, hospitals are collectively losing hundreds of millions of dollars in revenue a month, Carter said, as they contend with the costs of treating COVID-19 patients.

Meanwhile, Carter said, another source of health-care funding, charitable giving, has dried up as the stock market nosedives.

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The scene is similar throughout the country. Boston Medical Center furloughed 10% of its workforce, or about 700 employees, the Boston Globe reported this week. Hospitals nationwide are expecting $100 billion in federal stimulus for health-care systems.

“I can tell you $100 billion alone is not going to come close to need,” Carter said.

Other workers who are remaining on the job are seeing pay cuts as their hours are trimmed back.

“Why furlough in the time of a pandemic?” said Carlos Aviles, a pharmacist at Temple University Hospital and a representative of the Temple University Allied Health Professionals union. “Now is the time to have all hands on deck. Now is the time to make sure that we do what we need to do to save lives.”

Temple is telling workers involved in non-emergency care to take administrative leave or use personal time off for two weeks, union leaders said. If the leaves last longer than their available time, workers could have to file for unemployment, said Celeste Bevans, another union member and radiation technician at Temple.

Temple had not replied to a request for comment as of Friday morning.

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Technicians who perform procedures like ultrasounds and CAT scans are still coming to work at Pottstown Memorial Hospital, but are seeing their hours cut by up to four hours a day, a union leader there said.

“They’re dedicated,” said Linda Heater, a unit support coordinator at the hospital and secretary-treasurer for the hospital’s chapter of SEIU Healthcare Pennsylvania. “They shouldn’t be losing hours, especially now of all times.”

Technicians should instead be reassigned, she said, to work in X-ray labs, which are busy now as physicians look for the telltale signs of “crushed glass” that shows up on scans of lungs and indicates COVID-19 infections. In a statement, the Pottstown hospital’s owner, Tower Health, didn’t address cutting worker hours, saying instead it was reassigning staff to areas where there is more demand for workers.

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Trinity Health Mid-Atlantic’s furlough plans, announced Wednesday, are expected to affect a portion of its staff across all its hospitals in the Philadelphia area, and cut hours for others at the Catholic nonprofit hospital chain. Some workers will keep their normal hours but will be reassigned.

The Trinity Health Mid-Atlantic system hospitals, which employ 125,000 people, include: Mercy Philadelphia Hospital in West Philadelphia; Nazareth Hospital in Northeast Philadelphia; Mercy Fitzgerald Hospital in Darby Borough; St. Mary Medical Center in Langhorne; and St. Francis Healthcare in Wilmington.

“These unfortunate but necessary actions will primarily impact nonclinical colleagues,” Trinity Health Mid-Atlantic spokesperson Ann D’Antonio said.

Similar measures will be carried out at Trinity Health’s 87 other hospitals across the country, D’Antonio said. The Michigan-based chain, one of the nation’s largest, did not say how many employees would be furloughed. They would retain health, dental, and basic life insurance benefits, D’Antonio said.

The loss of revenue is directly tied to state and federal government orders requiring hospitals to stop elective procedures and outpatient services, which subsequently cut off more than half of Trinity Health hospitals’ revenues, CEO Mike Slubowski said in a memo to employees. Before the pandemic, Trinity had been running with a 0.5% operating margin, the memo stated.

“We expect that we will lose millions of dollars throughout this pandemic,” Slubowski said. “While we are providing more telehealth visits, our estimates are that, even with the increase in inpatient volumes anticipated with the COVID-19 surge, we will not generate enough revenue to cover our costs.”

That same bleak outlook is facing hospitals throughout Pennsylvania, Carter said. The average hospital operates with a 4% to 5% profit margin, he said. About a third of the state’s hospitals reported a loss last year, he said.

Shore Medical Center’s voluntary layoff plan came as the hospital invested “significant resources” on personal protective equipment for workers involved in COVID-19 care, while also facing a “dramatic decrease in revenue” because of nonemergency surgery cancellations.

“We are doing what is necessary to provide our clinical teams on the front line with everything they need to treat our patients and remain safe,” said Brian Cahill, a hospital spokesperson. “We are also trying to avoid what is happening or is likely to happen with other hospitals, including closures and mass layoffs.”

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The hospital is not accepting layoff volunteers from clinical staff, Cahill said, and the expectation is a large number of dismissed workers will return once the pandemic is over. Hospital executives also took a pay cut between 25% and 35% of their salary.

Robert Field, director of Drexel University Law School’s Public Health Program, explained that profits from elective and other procedures that can be postponed typically subsidize less lucrative services like intensive care.

“If they can’t do the elective procedures, it’s like trying to fly the airplane without first-class seats,” Field said. “Everyone’s just flying coach.”

Field said that caring for patients with coronavirus is expensive due to what can be weeks-long stays in the ICU, requiring expensive equipment like ventilators and isolation rooms. Hospitals are also having to spend more on personal protective equipment for clinical staff, which is scarce and increasingly costly.

Field said departments like marketing and patient relations are indirect money-makers that aren’t needed right now.

“This is all hands on deck on the clinical side,” said Field. “They can’t afford the luxury of long-term thinking. They just need to worry about staying in business through the crisis.”