In a move designed to mitigate the financial impact of the COVID-19 pandemic, Trinity Health has announced a cost reduction plan involving staff furloughs and cuts in executive pay.
Under the plan, 12% of Trinity’s 2,800-member workforce, or approximately 350 employees, is placed on furlough beginning April 12, 2020. Exceptions include essential staff needed for patient care. In addition, Trinity’s executive team and middle-management staff will undergo salary reductions of 20% and 10% respectively.
In announcing the plan, President and CEO John M. Kutch cited a 50% reduction in overall business due to strong advisories by state and federal authorities to cancel elective surgeries and other non-urgent medical appointments to slow the spread of COVID-19 and make space for patients sick with the virus.
Losses in the financial markets have also impacted Trinity’s income at a time when it is taking on additional costs due to the rising number of COVID-19 patients in the region and the climbing costs of personal protective equipment (PPE).
“Trinity Health’s leadership, in partnership with our medical staff, has worked hard to preserve employment as much as possible, in part by deploying hundreds of staff members into new roles,” Mr. Kutch said. “Given the economic challenges linked to federal and state requests, we have had to make tough operational decisions. We consider these cost-cutting measures to be targeted and temporary.”
Renae Lenertz, Vice President of Human Resources, emphasized that employees affected by the furloughs will maintain an employment relationship with Trinity Health and continue to receive health benefits. Furloughed staff may use their paid time off to supplement income, and applying for unemployment compensation is also an option.
“We expect these furloughs to last no more than 60 to 90 days; when patient volumes return, we plan to restore services and bring these employees back,” Lenertz said, adding, “There is nothing we value more than our employees, but at the moment we need to bring our labor management strategies into closer alignment with current clinical demand.
Health systems find themselves in unprecedented circumstances nowadays, Kutch noted, hence the need for unprecedented measures.
“The plan we have implemented is absolutely necessary to sustain our clinical operations during and after the COVID-19 outbreak,” he said. “While painful for us, many hospitals and health systems around the country are implementing the very same measures. I appreciate the patience and support shown by our patients, even as they’ve had to endure unprecedented disruptions. Our focus today, as always, is on getting them the care they need, when they need it, and in an appropriate and safe setting.”