Erlanger to furlough staff, reduce leadership pay

Chattanooga, Tenn.-based Erlanger Health system said it is implementing a cost-reduction plan that includes furloughs and pay reductions for leadership prompted by the coronavirus pandemic. 

Tennessee officials March 23 ordered hospitals and ambulatory surgery centers in the state to suspend elective procedures to free up capacity and supplies to treat COVID-19 patients. As a result, Erlanger saw a 30 percent to 40 percent drop in revenue within days, according to Erlanger President and CEO Will Jackson, MD.

To help ensure financial stability, Erlanger is implementing an expense reduction plan that will furlough some administrative employees, reduce overtime, halt job recruitment for administrative positions, cut vacation accruals and suspend company retirement contributions. 

In addition, leadership will take pay cuts. 

"An immediate and decisive action was required to ensure we continue to provide essential services to the community and safeguard the long-term health of the organization," Dr. Jackson said. "We recognize that financial hardships are faced by many businesses and individuals today. We are optimistic that Erlanger, our community and our nation will overcome this crisis, and that far better days are ahead." 

More articles on healthcare finance: 
Hospitalization charges for COVID-19 patients could top $1.4 trillion
Meadville Medical Center furloughs 225+ employees to ensure financial stability
Mission Health sends refunds to patients affected by billing change

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