Becker's Hospital Review

13 CFO / FINANCE 'All other options have been exhausted': UW Medicine furloughs 5,500 By Alia Paavola and Kelly Gooch U W Medicine announced in May it would furlough 1,500 nonunion em- ployees and 4,000 union employees to help address an anticipated $500 million loss due to COVID-19. Affected employees will be furloughed for at least one week and up to eight weeks. During the furlough, employees will retain healthcare benefits. "Any actions that impact our workforce, even temporarily, are taken only when all other options have been exhausted," said Paul Ramsey, MD, UW Medicine CEO. "While there are still many unknowns ahead, we believe furloughs com- bined with the other steps we have taken will put us in the best position to pre- serve jobs and continue to support the excellence of UW Medicine's clinical, research and education programs." The Seattle-based system said executive leaders, directors and managers will also take furloughs. UW Medicine said the financial hit is a result of a dip in clinical revenue due to the cancellation of elective procedures coupled with increased expenses to boost diagnostic testing and acquire protective gear. n Cash crunch from COVID-19 could force 100 hospitals to close By Ayla Ellison F inancial damage caused by the COVID-19 pandemic could cause up to 100 hospitals to close within a year, according to an analysis by USA Today. The analysis revealed thousands of hospitals across the U.S. were strapped for cash before the pandemic. Only about half of the 5,000 hospitals that reported cash-on-hand figures in 2017 had enough money to cover one month of salaries, according to USA Today's analysis of financial reports submitted to CMS. For many hospitals that were under financial stress before COVID-19 arrived in the U.S., the dramatic drop in revenue due to canceling nonemergency care and increased supplies costs could cause them to close. Of the more than 2,700 counties with confirmed cases of COVID-19, nearly half are served by a hospital that recorded negative net income in 2017, according to USA Today's analysis. Rural America may see more hospital closures than urban areas. According to USA Today, nearly half of the hospitals in jeopardy are in rural counties. To combat the economic damage caused by COVID-19, President Donald Trump signed four emergency funding bills into law, one of which provided $75 billion for hospitals. Another aid package created a $100 billion emergen- cy fund to reimburse healthcare providers for expenses or lost revenue related to the COVID-19 pandemic. Within that pool, HHS allocated $10 billion to rural hospitals and clinics. n How CHS, Tenet, HCA and UHS fared in Q1 By Ayla Ellison T he COVID-19 pandemic affected major for-profit hospital networks' financial and operating performance in the first quarter of 2020. 1. Franklin, Tenn.-based Community Health Systems' revenues dropped 10.4 percent year over year in the first quarter of 2020. e decline was largely due to CHS owning fewer hospitals and lower patient volumes due to the COVID-19 pandemic. CHS ended the first quarter of 2020 with net income of $18 million, compared to a net loss of $118 million in the same period a year earlier. 2. Nashville, Tenn.-based HCA Healthcare posted revenues of $12.9 billion in the first quarter of this year, up 2.7 percent from the same period a year earlier. Same-hospital admissions were up less than 1 percent year over year, while same-facility emergency room visits, inpatient surgeries and outpa- tient surgeries declined. e company said patient volumes were significantly impacted in the last two weeks of the first quarter as various COVID-19 policies were imple- mented by federal and state governments. HCA ended the first quarter of this year with net income of $581 million, down 44 percent from $1.04 billion in the same pe- riod last year. 3. Dallas-based Tenet Healthcare posted rev- enues of $4.52 billion in the first quarter of this year, down slightly from $4.55 billion in the first quarter of 2019. e company end- ed the first quarter of 2020 with net income of $94 million, compared to a net loss of $20 million in the same period a year earlier. Ten- et said the COVID-19 pandemic lowered its net income by about $73 million in the first quarter of this year. 4. King of Prussia, Pa.-based Universal Health Services reported revenues of $2.8 billion in the first quarter of 2020, up less than 1 percent from the same period last year. UHS said the COVID-19 pandem- ic had "a material unfavorable effect" on its operations and financial results in the first quarter. e company ended the first quarter of this year with net income of $142 million, down 39 percent from a year ear- lier. n

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