Stanford Health Care implements cuts, avoids layoffs

Palo Alto, Calif.-based Stanford Health Care is cutting pay and staff hours amid the COVID-19 pandemic, the health system confirmed to Becker's Hospital Review.

In an emailed statement, the health system said it has implemented a temporary workforce adjustment that applies to all Stanford employees. Employees who are not represented by a union may either use paid time off incrementally from April 27 to July 4 with the option to go into a negative PTO balance as needed; or take a 20 percent pay cut for the 10-week period. Stanford said unionized employees will also participate in the program during this period subject to the terms and conditions of their respective contracts. On April 27, the health system reported that nearly all employees (99 percent) had chosen to use the PTO option.

"The program was designed intentionally to ease the burden on staff by avoiding layoffs and allowing them to maintain earnings even if they have exhausted their paid time off," Chief Human Resources Officer David D. Jones wrote in a separate email. "It also applies evenly to everyone, so executives are expected to participate the same as front-line staff. Many leaders are also considering donating some of their paid time to help staff who may have exhausted their balance."

The health system, which has about 14,000 employees, attributed the employee cuts to the economic effects of the pandemic and the necessity to sustain the long-term financial health of the health system.

Emergency room visits at Stanford Hospital have decreased about 40 percent since March 16, and hospitals have also canceled revenue-making elective surgeries amid the pandemic, health system spokesperson Lisa Kim told the San Francisco Chronicle.

The pay reductions will apply to employees at Stanford Hospital, Lucile Packard Children's Hospital Stanford and Stanford-ValleyCare, according to Palo Alto Weekly, which first reported the cost-cutting moves.

When asked whether physician salaries were included in the cuts, Ms. Kim reiterated to the Weekly that cuts are "across the board."

Stanford said the measure won't affect health system operations.

However, the Service Employees International Union-United Healthcare Workers West, which has about 2,000 members affected by the Stanford cuts, told the Chronicle the cuts could place a significant financial burden on workers and their families. 

Union spokesperson Steve Trossman said the union hopes to bargain about the cuts.

Read the full Chronicle story here and the Weekly story here.




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