Senior exec salaries cut by 10% in Billings Clinic financial stability plan

To improve its financial picture, Billings (Mont.) Clinic is reducing pay for physicians and senior executives, in addition to various other cost-cutting measures, a spokesperson confirmed to Becker's April 3. 

The efforts are part of a new financial sustainability plan.

"We have asked every department across the system to help find ways to decrease costs and increase patient access. We are seeing successes in that work, including increased patient access in many areas, but still need to do more," Billings Clinic said in a statement. 

The health system continues to record monthly losses, which it said are unsustainable. Billings Clinic attributed the losses to factors affecting hospitals and health systems in the U.S. such as increased costs for supplies and labor, including contract labor, along with unpredictable post-pandemic patient volumes. At Billings Clinic, labor costs have risen from under 60 percent of its net patient service revenue to more than 70 percent. That's where the financial sustainability plan comes into play, according to the organization.

"We have created a financial sustainability plan to mitigate our losses and return us to positive operating results," Billings Clinic said. "Some measures have already begun, but this will take time to fully implement. Everything is being done with the goal of ensuring the long-term health of our organization so that we can provide the care to our patients and the communities we serve."

The plan includes:

  • Pausing the employer match for the 403(b) retirement plan for all participating employees through the end of this year.
  • Reducing physician salaries by 5 percent from April through June. 
  • Freezing business travel, except for approved travel.
  • Freezing hiring for most new hires, except for those providing direct patient care, to allow Billings Clinic to replace contract labor or other critical positions.
  • Reducing the use of contract labor and travelers whenever possible, and reducing costs for any contract labor that is still needed for clinical purposes.
  • Contracting with U.S. Anesthesia Partners to provide anesthesia services alongside Billings Clinic partners with Billings Anesthesiology. 
  • Freezing capital projects and expenditures.
  • Not filling open positions in executive leadership 
  • Reducing compensation by 10 percent for senior executive team members.
  • Waiving stipends for members of Leadership Council related to additional duties.

"We are in the midst of implementing these changes and our current environment requires us to think differently and creatively about operational improvements while ensuring that we are providing the service and care on which our patients depend," the health system said. "Billings Clinic has shown extraordinary resilience in the face of challenges in the past and we are committed to doing what is necessary to ensure the success of our organization."

Billings Clinic, Montana's largest independent healthcare system, has more than 4,700 employees at locations in Montana, Wyoming and the western Dakotas, according to its website.

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