Financial fallout from COVID-19: 9 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, and others have had to scale back services or close. 

U.S. hospitals are estimated to lose more than $323 billion this year, according to a report from the American Hospital Association. The total includes $120.5 billion in financial losses the AHA predicts hospitals will see from July to December. 

Lower patient volumes, canceled elective procedures and higher expenses tied to the pandemic 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 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. More than 260 hospitals and health systems furloughed workers this year and dozens others have implemented layoffs. 

Below are nine hospitals and health systems that announced layoffs since Aug. 1. 

1. Springfield, Ill.-based Memorial Health System laid off 143 employees, or about 1.5 percent of the five-hospital system's workforce. The health system cited financial pressures tied to the pandemic as the reason for the layoffs. 

2. Watertown, N.Y.-based Samaritan Health announced Sept. 8 that it laid off 51 employees and will make other cost-cutting moves to offset financial strain linked to the COVID-19 pandemic.

3. Chicago-based Cook County Health is laying off about 130 workers due to a budget shortfall of $187 million for fiscal year 2021. Rising demand for charity care coupled with financial strain of the pandemic contributed to the budget shortfall. 

4. Citing patient volume changes caused by the COVID-19 pandemic, MemorialCare's Long Beach (Calif.) Memorial Medical Center laid off 40 staff members. The layoffs, which occurred in August, mainly affected administrative and management positions.

5. Citing financial hardships due to the COVID-19 pandemic, Barnstable, Mass.-based Cape Cod Healthcare said it will lay off 118 employees and extend 10 percent salary reductions for senior executives.

6. The University of Texas Medical Branch in Galveston is laying off 200 workers as it faces a budget shortfall of $174 million. Interim President Ben Raimer, MD, said the budget shortfall is due to financial damage linked to the COVID-19 pandemic. The layoffs will affect approximately 1.5 percent of UTMB Health's workforce. 

7. Indianapolis-based Community Health Network saw revenues decline in the first six months of this year and ended the period with an operating loss. The health system implemented several cost reduction initiatives to help reduce financial strain. As of June 30, the health system cut 80 jobs, eliminated the match component of its 401(k) plan from Aug. 1 through Dec. 31, announced plans to close its inpatient rehabilitation hospital in Kokomo, Ind., and consolidated revenue cycle and other information systems to eliminate $61.6 million in costs. 

8. Martha's Vineyard Hospital in Oak Bluffs, Mass., cut 11 administrative positions. The hospital cited financial challenges linked to the COVID-19 pandemic as a reason for the layoffs. The hospital said it is adding patient care-related positions. 

9. Yuma (Ariz.) Regional Medical Center said Aug. 4 it will cut 34 positions. The hospital said the layoffs primarily affect those in support roles and are due to lower inpatient volume.


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