UH Cuts Staff Salaries As Hospital Takes Financial Hit From COVID-19

Apr 23, 2020
Originally published on April 23, 2020 3:59 pm

Gov. Mike DeWine announced Wednesday a partial rollback on his ban on elective medical procedures in Ohio — the same day University Hospitals announced staff pay cuts. Less than 24 hours later, UH also said it plans to shut down some emergency services by the end of the month.

The hospital will reduce the hours of more than 4,000 employees and their pay by 20 percent because of the financial impact of COVID-19, UH officials said in a written statement.

On the heels of that news, UH announced Thursday it is closing all of its stand-alone emergency departments around the Cleveland area on April 26.

There has been a 70 percent decline in people using the hospital's freestanding ERs, so UH is temporarily closing facilities in Avon, Amherst, Broadview Heights, Kent and Twinsburg. UH previously closed ERs in Andover and North Ridgeville.

Workers at the facilities will have the option to move to new positions, officials said in a news release.

Hospitals have been hit hard financially by the costs associated with preparing for a surge in coronavirus patients and "a sharp decline in revenues from the suspension of non-essential surgeries and procedures," said UH officials in press release. The hospital system declined ideastream's request for an interview.

A range of employees from executives to clinical staff will be affected by the pay reductions, except those health care workers who directly treat COVID-19 patients, UH said.

During his Wednesday coronavirus briefing, DeWine said he is asking hospitals to reassess surgeries and diagnostic procedures that have been postponed because of the virus. Healthcare providers will be allowed to move forward with some procedures soon, but DeWine stopped short of totally lifting the elective surgery ban or providing a timeline.

“We are going to have a more expansive order coming up in the next several weeks,” he said.

Having patients postpone needed procedures was not the original intent of the state directive, he said.

“You might have had someone who was supposed to have hip surgery. It might have got postponed, but now the pain is significant. It’s affecting their quality of life. We certainly don’t want to delay that person’s surgery,” DeWine said.

Northeast Ohio hospital officials are feeling relieved and are looking forward to being able to do even more elective surgeries, said Lisa Anderson, senior vice president of member services for the Center for Health Affairs. The regional hospital association represents 36 large and small Northeast Ohio hospitals, including UH.

The impetus for putting elective surgeries on hold was the fear of a huge surge of COVID-19 patients into our health system, Anderson said. The prediction back in March was there would be 10,000 new cases a day, which would have completely overwhelmed the hospitals, she said. There also would have been a huge demand for personal protective gear, she said.

“As soon as it became clear that the surge went from as many as 10,000 patients a day down to 1,600 new cases a day, then hospitals started looking at what can we open back up again,” Anderson said.

Both inpatient and outpatient elective procedures are crucial to a hospital's financial viability, said Baldwin Wallace University School of Business Prof. Thomas Campanella.

Outpatient medical procedures on hips, knee, and backs are some of the biggest sources of revenue for most hospitals, Campanella said.

“That revenue that they get helps subsidize other areas of the hospital where they either have much lower margins or in some cases are actually losing money,” he said.

The Ohio Hospital Association collected information from hospitals across the state and found hospitals were losing about $1.27 billion per month since the COVID situation increased, Anderson said.

“That’s about $42 million a day,” she said

Even though hospitals can now begin to review cases and schedule some procedures, there is no guarantee that patients will want to come back, Campanella said.  Fear of catching the virus may prevent people who need medical attention from going into hospital inpatient or outpatient settings right now, Campanella said.

Anderson agrees that hospitals will have to be vigilant and ensure people can maintain a safe distance in waiting rooms and other spaces.

“People want to feel safe coming back into a hospital or a health care facility. So that means that not as many people are going to be able to sit out in waiting rooms and be exposed to each other," Anderson said.

Patients will also have to wear masks coming into facilities and limit the number of people who come with them, Anderson said.

UH officials said the governor’s announcement allowing some elective procedures does not change their plans to cut staff salaries. A hospital spokesperson pointed to a comment from the governor about the need for hospitals to catch up.

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