Financial fallout from COVID-19: 10 hospitals laying off workers

The financial challenges caused by the COVID-19 pandemic have forced hundreds of hospitals across the nation to furlough, lay off or reduce pay for workers. 

U.S. hospitals are estimated to lose $200 billion between March 1 and June 30, according to a report from the American Hospital Association. The combination of canceled elective procedures, which make up about $161 billion of the expected revenue losses, and the costs of preparing for a surge of COVID-19 patients have created a cash crunch for hospitals. Though Congress has allocated $175 billion in relief aid for hospitals and other healthcare providers, it isn't enough to cover the lost revenue and higher expenses some are experiencing due to the pandemic. 

Hospitals are taking a number of steps to offset the financial damage. Executives, clinicians and other staff are taking pay cuts, capital projects are being put on hold, and some employees are losing their jobs. Nearly 270 hospitals and health systems have furloughed workers in recent months and several others have implemented layoffs. 

Below are 10 hospitals and health systems that have announced layoffs since May 1. 

1. Grand Forks, N.D.-based Altru Health System laid off 167 employees, about 6.5 percent of its workforce. The health system attributed the layoffs to financial challenges tied to the COVID-19 pandemic. Altru paused construction on a new hospital, rolled back staffing hours and cut executive pay by 30 percent before resorting to layoffs.

2. Bluefield (W.Va.) Regional Medical Center is ending services by July 30 and laying off 340 employees. Officials said the decision to shut down the hospital was based on several factors, including declining patient volume and reimbursement rates and significant financial damage tied to the COVID-19 pandemic. 

3. The University of Mississippi Medical Center in Jackson announced in late May that it is laying off 250 workers. In a memo to employees sent May 27, hospital leaders said UMMC had been losing more than $1 million per day since mid-March, and internal projections show a $100 million deficit through September. 

4. Dallas-based Baylor Scott & White Health announced in late May that it was laying off about 1,200 employees, nearly 3 percent of its workforce. The Dallas-based health system spent $85 million to prepare for and respond to the pandemic, and it also saw patient volume declines between 50 percent and 90 percent, depending on the site of care. 

5. Pittsburgh-based Allegheny Health Network announced May 21 that it would lay off 250 of its more than 21,000 employees. The affected jobs are primarily in corporate and administrative functions, but include some clinical staff at physician practices. The layoffs were partially due to lower patient volume and fewer elective surgeries due to the pandemic. 

6. Duluth, Minn.-based Essentia Health laid off 900 employees, about 6 percent of its workforce, to help offset severe financial damage caused by the pandemic. As of late May, the health system was facing $100 million in losses due to declines in patient volume since the beginning of March. 

7. Buffalo, N.Y.-based Erie County Medical Center laid off 70 workers to help offset losses tied to the pandemic. The hospital said the layoffs were necessary after it didn't meet the threshold to receive targeted hot spot funding through the Coronavirus Aid, Relief and Economic Security Act. 

8. Valley View Hospital in Glenwood Springs, Colo., laid off about 100 employees, approximately 10 percent of its workforce. In an internal memo, Valley View Hospital CEO Brian Murphy, MD, said the COVID-19 pandemic had "dramatically reduced" the hospital's income. The hospital is projecting a decline in income of $30 million to $45 million this year due to COVID-19. 

9. Fulton County Medical Center in McConnellsburg, Pa., laid off 36 employees in early May due to the financial strain of the pandemic. The layoffs, mostly in nonclinical departments, will help ensure the long-term viability of the hospital, officials said. 

10. King City, Calif.-based Mee Memorial Healthcare System laid off 55 workers to help offset revenue declines due to the pandemic. The health system said it pursued financial assistance through the Coronavirus Aid, Relief and Economic Security Act and other programs but a funding gap remained. 

More articles on healthcare finance: 
HHS to dole out $35B in CARES Act funds: 6 things to know
10 latest hospital credit rating downgrades
State-by-state breakdown of 130 rural hospital closures

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