St. Lawrence Health System to furlough 400, Claxton 12% more due to decreasing patient volume
St. Lawrence Health System, with hospitals and clinics in Potsdam, Canton, Gouverneur, Massena, Brasher Falls, DeKalb Junction, Colton, Edwards and Norfolk, plans to furlough at least 400 workers to help control expenses during the pandemic.
And Claxton-Hepburn Medical Center in Ogdensburg, which earlier this month placed 69 employees on unpaid leave, announced more employees are being furloughed, for a total of 20% of the workforce. Further declines in revenue, and a lack of qualification for the current state and federal aid programs, forces CHMC to make new difficult decisions, said a press release from the hospital.Similarly, citing severe patient volume disruptions caused by the COVID-19 (coronavirus) pandemic, St. Lawrence Health System plans to temporarily furlough 20% of its workforce
“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,” said Chief Executive Officer of St. Lawrence Health System David Acker.
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, said a press release from SLHS.
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, the press release said.
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, will begin 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.
At Claxton-Hepburn, “The erosion of revenue caused by the pandemic puts us in a challenging position, especially with no indications or timelines for stimulus support,” said Richard Duvall, CEO & President of CHMC, “I’m certain every hospital in New York state is making these tough decisions.”
The additional workforce measures affect nearly 20% of its employees, which includes the 8% announced last week. These measures include temporary salary reductions, placing employees on unpaid leave, and reduced work hours. Most salaried employees, including those at the senior level, will take a 20% salary reduction to help control costs.
CHMC has taken a deliberate approach to examine solutions that balance employee benefits and the financial health of the organization, both during and post-pandemic, the hospital said.
Out of all the options available to CHMC, including lay-offs, unpaid leave offers employees access to benefits that a traditional lay-off does not, and allows for a quicker process to reintegrate its employees, said hospital management.
“The COVID situation remains fluid, but its effects have and will continue degrading to decrease our daily operations. While we may not be able to employ all of our workforce today, we will call on them to fill emergent needs and, more importantly, return to a new normal as this pandemic concludes. We stand by our employees and are doing our best to preserve their benefits. We are the stewards of this organization now and into the future,” says Duvall, “CHMC remains committed to meeting the healthcare needs of North Country residents, during the pandemic, and beyond.”
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