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In the latest round of job losses resulting from the coronavirus pandemic, Einstein Healthcare Network told department heads Tuesday that the health system was moving forward with a furlough.
In internal documents obtained by WHYY, Einstein Healthcare told department leaders that their physician practice and outpatient volumes are down 40 to 50%. Emergency room visits are also dramatically low, they said, because patients who do not have COVID-19 symptoms are doing whatever they can to avoid the hospital.
Health system officials said they project a $50 million to $60 million hit this fiscal year, most likely the largest loss in Einstein’s history. The internal documents note that nearly 70% of the health system’s expenses are staff-related.
Department heads were instructed to choose which employees to furlough by Tuesday, based on a set of criteria. No department is exempt, although certain centers with drastically reduced volume, such as ambulatory surgery centers, were offered as an example of a department where all staff may be furloughed, while an intensive care unit might require no changes. Department heads were encouraged to prioritize seniority, and cancel per diem and temporary employees first.
Furloughed employees can take up to two weeks of earned paid-time off before the furlough kicks in, at which point they will be eligible for unemployment compensation. They will retain health care benefits during the furlough. The documents indicated that the policy will be reevaluated in June.
Einstein employs 8,500 workers across three hospitals in the region, which together have the capacity for 1,000 patients. Its North Philadelphia facility accounted for 10% of all inpatient admissions in the city in the second quarter of 2019, second only to Temple University Hospital.
Not affiliated with any large research university, Einstein had been struggling financially before the pandemic. Last month, the Philadelphia Inquirer reported that Einstein “had an operating loss of $4.3 million on $1.3 billion in revenue in the year ended June 30.”
In a statement, Einstein’s senior director of corporate communications Damien Woods wrote that the health care network is “currently exploring many options on how to best battle COVID-19, while striving for … long term financial stability.”
Maureen May, president of the Pennsylvania Association of School Nurses and Allied Professionals, which represents more than 1,000 registered nurses among Einstein’s hospitals, said the union had not been notified of furloughs.
“If they were laid off, that would be a mistake because staffing right now is crucial,” May said. “There’s a great need for additional help at the bedside during the pandemic.”
Einstein is the latest in a string of Pennsylvania hospitals to cut staff because of the pandemic. Trinity Health Mid-Atlantic announced earlier this month that it would furlough workers across its five regional hospitals. Steward Health, with hospitals in Easton and Sharon, did the same.
Though it might seem as if hospitals are doing more business than ever because of coronavirus, their primary revenue streams have been shut off by being forced to cancel elective surgeries. Hospitals are losing $1.5 billion to $2 billion monthly — or 40% of their monthly revenue — according to the Hospital Association of Pennsylvania.
“This staggering amount of loss greatly overshadows anything we’ve experienced before,” said Andy Carter, president and CEO of the hospital association.
Though he said there is no reason not to believe that treatment for COVID-19 won’t be reimbursed, those procedures will be less expensive than the more costly elective surgeries hospitals were forced to cancel to make space for COVID patients. And, many COVID patients are insured by Medicaid and Medicare, which reimburse hospitals at lower rates than private payers.
In response to their financial troubles, last week Gov. Tom Wolf announced a $450 million fund to provide emergency loans to the state’s struggling hospitals.
“All these efforts come at a cost,” Wolf said. “We cannot allow any of our hospitals to become bankrupt.”
Last week, the U.S. Department Health and Human Services announced $30 billion of the CARES Act would be given as payments, not loans, to hospitals that need it most. All facilities and providers that received Medicare fee-for-service reimbursements in 2019 are eligible for the funding. Nearly 80% of Einstein’s patients at its North Philadelphia hospital are insured through Medicaid and Medicare.
Carter said that while the hospital association is grateful for the state and federal support, regardless of how much is allocated to Pennsylvania hospitals, “it is almost certainly not even close to enough to address the gaping hole in their finances.”