Carilion Clinic announced Tuesday that it will cut pay for executives, trim hours for some employees, furlough others and delay expansion projects.
The moves are in line with actions by health systems across the country as a response to the financial toll caused by the COVID-19 pandemic. Carilion has seen a sharp decline in revenue as outpatient visits and surgeries are halted, and has taken on unexpected expenses in purchasing equipment, medications and supplies and readying units for infectious patients.
CEO Nancy Agee told employees of the changes in a video email Tuesday morning, and managers and human resources staff are expected to meet throughout the day with those affected by the pay cuts.
Agee in a Monday interview that was embargoed until Tuesday said Carilion did not yet have figures available as to how much the pandemic response has cost in revenue or expenses. Nor is it known yet how many of the system’s 13,000 employees will be affected.
“We have been reducing people’s hours for some weeks. A lot of people have had to take paid time off, work from home or have their hours reduced. We are just doing this a little more widely and formally now,” she said.
Agee and other executives are taking 20% pay cuts. Vice presidents will have their pay reduced by 10%. Administrative staff will have their hours reduced to 32. Some employees who worked in outpatient centers, urgent care and surgery have been reassigned to jobs created by the crisis, such as safety monitors and screeners.
Employees who are furloughed can continue to take paid time off, accruing up to 80 negative hours, or could be eligible for unemployment. Carilion will continue to pay health, dental and vision insurance premiums.
The cuts are expected to be temporary.
“If I thought people were going to be laid off and not needed, I would tell them that now. I don’t need to go through this twice. We are reducing hours and furloughing based on workload with every intent, every intent, of bringing people back,” she said.
Agee said the moves are intended to keep Carilion in a strong financial position.
“We have a deep abiding faith to our mission, and it really is our honor to serve the health needs of our community. Every day, we focus on healing and the home our staff brings to the region,” she said. “At the same time, we understand we are the most important economic engine in this region. And while social distance is key to contain the virus, it is at great cost to our country, our community, and now to us at Carilion as well.”
Agee said patient volumes are down 40% to 70% in outpatient practices, urgent care, emergency departments and at all the hospitals. Meanwhile, expenses are inflated.
“The cost of medical supplies and personal protection equipment is staggering, as is the increasing costs for medications,” she said.
Carilion last year announced it planned to invest $1 billion over the next seven years on capital improvements that included a new tower at Carilion Roanoke Memorial Hospital, a new behavioral health hospital across from it on Jefferson Street, a parking garage and a pedestrian skyway to connect all of it.
That project will be postponed until September. Other capital projects, including IT upgrades, are also on hold.
Earlier this month, LewisGale Regional Health System said it would attempt to redeploy staff members whose jobs were idled with service reductions. Those who could not be reassigned are receiving 70% of their base pay for up to seven weeks until HCA Healthcare, LewisGale’s parent company, better understands the long-term financial implications of the pandemic on the organization.
Also, Ballad Health, the predominant health system in Virginia’s coalfields and northeastern Tennessee, announced that it would furlough 1,300 employees and close some of its urgent care centers.