Citing severe patient volume disruptions caused by the COVID-19 (coronavirus) pandemic, St. Lawrence Health System plans to temporarily furlough at least 400 workers.
Chief Executive Officer of St. Lawrence Health System David Acker stated,“Our hospitals are facing an unprecedented pandemic; managing crushing costs in treating COVID-19 patients in circumstances that require extensive and expensive protocols and investing in the infrastructure preparedness for the COVID-19 surge, all while seeing the traditional sources of revenue from every day, medically necessary care bottom out.”
Health care facilities are under financial pressure after a steep drop-off in their normal monthly utilization and revenue, meant to free up hospital space and preserve protective equipment for the coronavirus outbreak.
St. Lawrence Health System said the cost-cutting measures are necessary given the revenue decrease from the cessation of elective procedures system-wide, and the temporary closure of Gouverneur Hospital’s operating rooms and many of the health system’s medical office sites. While at the same time, they are investing in efforts to fight the virus like buying personal protective equipment supplies, transforming units to COVID-19 wings for treatment, and setting up drive-thru testing sites.
Although St. Lawrence Health System said it remains fiscally solid, it also stated that the pandemic-related volume decline is too significant to ignore.
"While I am confident we will get through this challenging period together and emerge even stronger, we must take necessary steps to manage the short- and long-term financial impact on our health system," Mr. Acker said.
St. Lawrence Health System is projecting a cash flow drop of $10 million in the next 30 days.
The furloughs, which include position reductions at all levels, including senior leadership, department directors, clinical staff positions, and touch virtually all departments across each of the health system’s three hospitals, began April 17, and affect 20 percent of St. Lawrence Health System’s staff of just over 2,000. In addition to the temporary furloughs, St. Lawrence Health System is cutting pay for its senior executives.
Affected employees will continue to receive health and pharmacy benefits from St. Lawrence Health System. The health system anticipates that a majority of affected employees will also be able to sustain their pay through federal and state unemployment benefits.