Kutch addresses announced furloughs
A Plan for Stability
Our nation is experiencing a deep and painful economic recession. Job losses across the nation have skyrocketed as restaurants, hotels, businesses, gyms, and travel have shut down across our country. Layoffs and furloughs are also rising in manufacturing, housing, and transportation – underscoring the magnitude of the coronavirus recession.
In March, more than 10 million Americans lost their jobs and applied for government aid, according to the U.S. Labor Department. In North Dakota, Governor Doug Burgum reported over 40,000 unemployment claims filed during the week ending April 11 – more than double the number of claims filed in the last two years combined.
Everyone is struggling with the economic impact of the coronavirus outbreak. Every American business, from coffee shops to auto dealerships, has suffered as Americans heed public warnings to stay home and practice “social distancing.”
Many more people will be finding themselves out of work as coronavirus and subsequent business closures and quarantine orders expand in the United States and here in North Dakota. This is a significant disappointment for so many individuals and families – in our country, in our state, and in our Minot community.
A Blow to Health Systems
Across the country, hospitals and health systems are laying off employees. In response to strong requests by state and federal authorities, elective surgeries are being canceled in anticipation of a surge of patients with COVID-19. These cancellations mean less revenue coming in from patients at a time when hospitals are trying to comply with other legislative requests – increasing bed capacity, for example – that add additional expenses at our most vulnerable time. Like other hospitals and health systems, Trinity Health has cut elective surgeries and non-urgent medical appointments to “slow the spread” of COVID-19 and to make space for patients sick with the virus. Patient beds, ventilators, and personal protective equipment (PPE) like gloves and masks are now on deck for frontline staff dealing with COVID-19 patients.
Trinity Health has taken these steps in accordance with state and federal guidelines. As a result of these measures, we have experienced a 50% reduction in overall business due to a decline in patient volume and services related to the pandemic. Compounding the problem is that health insurers are processing claims more slowly as they adapt to a remote workforce. In addition, losses in the financial market have impacted Trinity’s income at a time when we are taking on additional costs attributed to the rising number of COVID-19 patients in the region and the increasing costs of PPE. All of these factors have forced us, as they have with many other businesses, to make swift cost reductions a top priority in order to remain financially stable.
As a number of hospitals across North Dakota are preparing for layoffs, furloughs, and reductions in force, Trinity Health is strategically focused on the reallocation and redeployment of its labor to areas where it is needed.
Trinity Health leadership, in partnership with our medical staff, is working hard to preserve employment as much as possible, in part by trying to deploy hundreds of staff members into new roles. For example, Trinity Health has redeployed clinical professionals and clinical technicians at hospital entrances where they are taking temperatures and screening people who enter. These same individuals have also been redeployed to Trinity Homes to pass dietary trays to residents, deliver supplies to departments, perform PPE education in many departments, and more.
We’ve made decisions and developed new processes quickly, and it is remarkable how our organization has pulled together to make quick transitions while maintaining the quality and level of service we normally do.
But sadly, these measures aren’t enough. Given the economic challenges linked to federal and state recommendations, we have had to make tough operational decisions regarding Trinity Health. Beginning April 12, we implemented a cost reduction plan that includes the following:
Trinity Health will place 12% of its employees on involuntary furlough. Exceptions include essential staff needed for patient care.
Trinity Health’s executive team and middle-management staff will undergo salary reductions of 20% and 10% respectively.
Other elements of our cost reduction plan include postponing 401(k) matches and tightening spending on contractors and vendors. Increases in bad debt expense and uncompensated care will likely prove to be factors as individuals face unemployment or underemployment given the impact of businesses shutting down temporarily in our region. The Trinity Health management team, which had been focused on operational improvements and new strategic initiatives, recognizes those strategies are taking a backseat at this time.
These measures and actions are targeted and temporary. The furloughs, expected to last 60 to 90 days, will affect Trinity Health employees unable to work because of temporary closures, cancellations, and decreased patient volumes in primary care, outpatient care, and surgical areas. Furloughed employees will have the option to use their paid time off to supplement their income, and they may apply for unemployment compensation.
Individuals who have been furloughed are still job-attached employees, meaning they have not been separated from employment with Trinity Health. They will continue to receive health benefits while on furlough, and they should be ready to come back to work within 24 hours if they are needed. They can also volunteer for temporary assignments across the health system through our labor resource pool. All furloughed employees are valued Trinity Health employees, but at the moment we need to bring our labor management strategies into closer alignment with current clinical demand.
Trinity Health Will Endure
These are unprecedented times. The plan we have implemented is absolutely needed to sustain our clinical operations during and after the COVID-19 outbreak. While painful for us, many hospitals and health systems around the country are implementing the very same measures. Paradoxically, we are in a position to help some of those healthcare workers who have lost their jobs, with temporary and permanent work in essential positions.
Clearly, we have not witnessed anything that matches the scale of this pandemic. Wherever you are in the region, whether at home with loved ones or on the front lines fighting coronavirus, I hope you are staying healthy and safe. I thank you for your patience and understanding over the last month as we’ve all experienced unprecedented disruptions. Our focus today, as always, is on getting you and your loved ones the care you need, when you need it, and in an appropriate and safe setting.