April 2 2020
REPOST from Medscape
Hospitals across the United States are preparing for a surge of COVID-19 patients while facing a shortage of cash from postponed elective procedures. Some are responding by furloughing nonclinical staff and cutting doctors' pay, Medscape Medical News reports, despite $200 billion earmarked for healthcare systems in federal stimulus money. One hospital CEO says he finds it offensive that the federal government is "bailing out airlines and cruise lines before our frontline men and women caring for patients."
Last week, doctors at St. Elizabeth's Medical Center in Boston learned via video conferencing that they would be receiving a 20% pay cut — a slap in the face at the precise moment that those on the front lines of the COVID-19 pandemic need a pat on the back (and some more N95 respirators too).
But Steward Health Care System, which runs St. Elizabeth's and dozens of other hospitals around the country, did the math and decided that the pay cuts were necessary to survive what they called "a seismic shock to our system." They also announced furloughs for a large number of their nonclinical staff.
Spirits sank after the announcement. "It was devastating," said one St. Elizabeth's doctor, who asked not to be identified for fear of retribution. "I didn't say much during the call because I was so panicked, and I didn't want to be crying on the call."
Someone else did speak up, a senior colleague who warned that such a cut would kill morale at a time when physicians were already feeling vulnerable because of other shortages, including personal protective equipment. (Requests for interviews with Steward Health Care System executives were declined.)
Furloughs, layoffs, and even firings are happening elsewhere too. Hospitals in virus hotspots have already come up short on beds and face masks. Now a shortage of cash is prompting many to fire some of their healthcare workers, or furlough them temporarily, or — like Steward Health Care System — slash their pay checks.
Despite almost $200 billion earmarked for hospital systems in the recently passed federal stimulus package, many hospitals are still in dire financial straits. Most make the majority of their money through so-called elective procedures, such as knee replacements and cataract surgeries, almost all of which have been postponed in order to conserve personal protective equipment and minimize spread of the virus. Those cancellations translate to a significant financial hit.
On top of that, hospitals will lose an average of $1800 on every COVID-19 case, according to projections by Strata Decision Technology, a healthcare financial planning and analytic company. Some, they estimate, may lose much more, between $6000 and $8000 per patient. And hospitals were already hurting. According to a report from Bloomberg, at least 30 hospitals entered bankruptcy in 2019.
Many hospital executives are bracing for months of hardship, leading to wrenching decisions to furlough or lay off staff, suspend bonuses or cut pay — even as some short-staffed hospitals in COVID-19 hotspots are issuing pleas for doctors to come out of retirement.
At St. Alexius Hospital, in St. Louis, Missouri, Sonny Saggar, MD, was fired as CEO after he clashed with a bankruptcy trustee. Saggar had proposed offering open beds to other hospital systems during the pandemic — an idea that, he said, was turned down out of concern for the bottom line.
"This is one of those times where we need to put down our search for profit and money and just look after people's lives. We're supposed to have that calling in healthcare," said Saggar, who has since been reinstated as Chief Strategy Officer and director of the COVID task force and emergency department. He noted that he and the trustee have resolved differences over funding.
At St. Claire HealthCare in Morehead, Kentucky, 300 employees who were not involved in direct patient care — a quarter of the hospital's staff — have been furloughed, something Donald Lloyd, II, St. Claire HealthCare's CEO as of May 1, described as forward thinking.
Massachusetts-based Atrius Health, for instance, placed many staffers on a 1-month furlough, while simultaneously withholding a percentage of working physicians' paychecks, saying that they plan to pay them back at a later date.