Saint Joseph Health System and Trinity Health are facing major cutbacks after projecting that operating revenue for the next fiscal year will be two billion dollars less than in previous years.
CEO Mike Slubowski made the difficult announcement that cutbacks are on their way.
Slubowski says while they did receive substantial grants from the 'CARES ACT' passed by congress, the money has already been spent to cover operating losses and it's not enough moving forward.
In a message sent to employees, the CEO says they are restructuring and re-sizing their workforce, which includes position eliminations and severances, extended or new furloughs and extended or new reductions is schedules.
In a statement sent to 16 News Now, Chief Executive Officer Chad Towner said it was a difficult decision to make.
See his full statement below.
Saint Joseph Health System (SJHS) announced that it will adjust staffing levels and other direct expenses to address decreased revenues caused by the COVID-19 pandemic and to ensure that the health system can serve its communities in the long term.
“Our mission is to be a transforming and healing presence in our communities, and we are making painful but necessary decisions to ensure that we can sustain our organization into the future,” said Chad Towner, Saint Joseph Health System chief executive officer.
“Like most health systems and other industries across the country, we are facing significant pandemic-related challenges. As we ramped up to support inpatients afflicted with COVID-19 and effectively shut down outpatient and elective services during stay-at-home orders, our revenues fell and operational costs increased. While we have received funding from the CARES Act that has helped cover our operating deficits for a few months, it is not enough to sustain us into the future.”
Though there are positive signs that patients are returning for services, the organization expects the recovery will be gradual, and there are many unknowns, with possible resurgence of the virus and the country’s economic recovery.
"We are seeing gradual rates of patient volume increase but expect our revenue will be lower than previous levels for at least a few years. In order to align our cost structure with volumes, we are making difficult and painful decisions that impact our colleagues," said Towner. "We are a healing ministry of people caring for people, and we will do our best to support our colleagues facing transitions.”
In the first quarter of fiscal year 2021, which begins July 1, Saint Joseph Health System will reduce positions in mostly non-clinical, administrative functions. Some of the affected colleagues will be among those who were furloughed over the past few months. Some staffing decisions will be position eliminations, and others will consist of extended furloughs or reduced
schedules. All colleagues whose positions are eliminated will be eligible for a paid notice period, severance pay and health and other benefits through their severance period.
Since March 2020, Saint Joseph Health System has invested significantly in supplies, equipment, pharmaceuticals, staffing and other needs to ensure colleague and patient safety to address the pandemic. During this time, SJHS has also taken several actions to manage expenses through temporary closure of under-utilized services, colleague furloughs and reduced schedules and executive leader compensation reductions.
“We must now focus on what is required to restructure our organization and redesign our services to meet the needs of our patients in the coming months as we continue to live with the presence of COVID-19,” said Towner. “I am confident that Saint Joseph Health System will emerge from this challenging time as a strong organization. We have a new strategic plan that will enable us to grow existing and new services. We remain committed to our Mission and Core Values, and we will persevere to fulfill the essential health needs of the communities we serve.”