Baptist Health will begin furloughing workers this week in an attempt to slash costs as patients cancel procedures and testing, creating “a serious financial strain” on the state’s largest health care system.
In a statement Monday evening, Baptist Health didn’t say how many workers would be affected by the furloughs, and a Baptist Health spokeswoman didn’t immediately respond to follow-up questions. As of Dec. 31, 2018, Baptist Health has about 11,000 employees working in a system that includes 11 hospitals in Arkansas.
As the coronavirus swept across the country, Baptist Health prioritized operations and placed resources where they were needed most, it said in a statement.
It also began reducing elective cases as patients started canceling elective procedures and testing. Visits to Baptist clinics and specialists dropped, creating “a business challenge,” Baptist Health said.
“Many employees have already had their hours reduced or shifts canceled due to the reduction in services being provided each day,” Baptist said in the statement.
“There are a number of things occurring that create a serious financial strain on all hospitals and health systems, including Baptist Health,” according to an email Baptist sent employees and obtained by Arkansas Business. The email by CEO Troy Wells said Baptist Health directors and executives will have their salaries reduced “for the coming months.”
The University of Arkansas for Medical Sciences told Arkansas Business Tuesday that it is not planning any furloughs “at this time, and we have not done any recently.”
Arkansas Children’s told Arkansas Business that it will work to cut costs, but not through furloughs, layoffs or cuts in benefits.
“We will remain intact as a team to weather this storm together,” Marcy Doderer, president and CEO of Arkansas Children’s said in a statement. “We need and value our team more than ever. Having said that, at Arkansas Children’s we understand and appreciate the unique challenges our health care colleagues across Arkansas and the United States are facing.
“We are all navigating the pressures of a pandemic response, new financial realities and caring for our teams while they care for the patients and families we are privileged to serve,” Doderer said.
Minimizing Financial Strain
In its public statement, Baptist Health said it “must respond to these financial challenges while taking care of our people and protecting our future.” It said employees who are furloughed will be eligible to keep their core benefits.
Still, Baptist said it “will continue to hire bedside caregivers and those critical to ongoing operations.
“It is our hope that these actions, along with the support from recently passed federal legislation, will minimize the financial impact to our employees and Baptist Health during this difficult time,” Baptist said.
On Monday, Gov. Asa Hutchinson signed an executive order forming a 15-member steering committee to direct $1.25 billion in federal funds the state expects to receive to combat the coronavirus outbreak.
He also approved an additional $45 million for the purchase of ventilators and personal protective equipment for health care workers. The governor had previously set aside $30 million for PPE. The anticipated federal funds are a result of the federal Coronavirus Aid, Relief & Economic Security Act, which President Trump signed Friday.
Baptist Health had shown improved financial health in 2019 over the previous year. In 2019, Baptist had $1.54 billion in revenue and $4.67 million in operating income, according to its unaudited financial statement. In 2018, it reported $1.21 billion in revenue and an operating loss of $20.88 million.
“Arkansans are relying on us to be steady and focused,” the Baptist Health statement said. “Our staff is working tirelessly to respond to this crisis and ensure that we are thinking ahead to be even stronger in the coming weeks and months.”
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