Ballad Health to furlough 1,300, expects cash flow drop of $150M

Citing severe patient volume disruptions caused by the COVID-19 pandemic, Johnson City, Tenn.-based Ballad Health said it plans to furlough at least 1,300 workers, cut pay for some senior leaders and suspend retirement contributions.

Ballad said the cost-cutting measures are necessary given an anticipated revenue decrease from government-imposed bans on elective procedures. Ballad is projecting a cash flow drop of $150 million in the next 90 days.

Although Ballad Health said it is stronger financially than many rural hospitals, it said "the pandemic-related volume decline is too significant to ignore."

The furloughs, which begin April 10, affect less than 10 percent of Ballad Health's staff of 15,000. 

About 1,100 furloughed employees work in Tennessee, and 200 to 250, are in Virginia, Ballad Health's CEO Alan Levine tweeted. A majority are in nonclinical roles. 

Affected workers will continue to receive health and pharmacy benefits from Ballad Health. Mr. Levine said about 70 percent of affected employees will be able to sustain their pay through federal and state unemployment benefits. 

In addition to the furloughs, Ballad Health plans to cut pay for senior vice presidents by 20 percent for 60 days and assistant vice presidents by 10 percent. 

Mr. Levine said he will forgo his salary for 60 days. 

Ballad Health also plans to suspend retirement contributions for the remainder of fiscal year 2020. 

"As Ballad Health has planned and implemented our response, we have done so with the safety and well-being of our team members, partners and community in mind," Mr. Levine said. 

Access the full news release here. 

More articles on healthcare finance:
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Minnesota hospitals are losing $31M a day in revenue, state association says

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