Becker's Hospital Review

10 CFO / FINANCE 8 nonprofit health systems got $1.7B bailout, furloughed more than 30,000 workers By Ayla Ellison S ixty of the largest hospital chains in the U.S., including publicly traded and nonprofit systems, had received more than $15 billion in emergency funds through the Coronavirus Aid, Relief and Economic Security Act as of early June, according to an analysis by The New York Times. Congress has allocated $175 billion in relief aid to hospitals and other healthcare provid- ers to cover expenses or lost revenues tied to the COVID-19 pandemic. e first $50 bil- lion in funding from the CARES Act was dis- tributed in April. Of that pool, HHS allocated $30 billion based on Medicare fee-for-service revenue and another $20 billion based on hospitals' share of net patient revenue. HHS also sent $12 billion to hospitals that provided inpatient care to large numbers of COVID-19 patients and $10 billion to hospitals and other providers in rural areas. ough one of the goals of the CARES Act was to avoid job losses, at least 36 of the larg- est hospital systems that received emergency aid have furloughed, laid off or reduced pay for workers, according to the report. Approximately $1.7 billion in bailout funds went to eight large nonprofit health systems: Mayo Clinic in Rochester, Minn.; Trinity Health in Livonia, Mich.; Beaumont Health in Southfield, Mich.; Henry Ford Health Sys- tem in Detroit; SSM Health in St. Louis; Mer- cy in St. Louis; Fairview Health in Minneap- olis; and Prisma Health in Greenville, S.C. Mayo Clinic furloughed or cut hours of about 23,000 workers, and the other seven health systems furloughed or laid off a total of more than 30,000 employees in recent months, according to the Times. e pandemic has taken a financial toll on hospitals across the U.S. ey're losing more than $50 billion per month, according to a re- port from the American Hospital Association. Of the eight nonprofit systems that collected $1.7 billion in relief aid, several have reported losses for the first quarter of this year, which ended March 31. For instance, Mayo Clinic posted a $623 million net loss, SSM Health's loss totaled $471 million, and Beaumont and Henry Ford Health System reported losses of $278 million and $235 million, respectively. Since CARES Act payments were automati- cally sent to hospitals, some health systems have decided to return the funds. Kaiser Permanente, a nonprofit system, is returning more than $500 million it received through the CARES Act. e Oakland, Calif.-based health system ended the first quarter with a $1.1 billion net loss. n Saint Luke's Health System to close Kansas hospital By Ayla Ellison K ansas City, Mo.-based Saint Luke's Health System will close its hospital in Leavenworth, Kan., on Oct. 1. The health system cited the financial strain from the COVID-19 pandemic as the reason for closing Saint Luke's Cushing Hospital. "Like health care organizations everywhere, we stocked up on resources and staffed up on people to prepare for a surge in cases," the health system said in a news release. "This in- creased expense came at the same time we had to defer elective procedures. These fac- tors resulted in significant financial strain and ultimately led to the decision to close Saint Luke's Cushing Hospital." Though the hospital will fully shut down on Oct. 1, its inpatient unit closed in July. Roughly 70 employees will be affected by the closure, according to The Kansas City Star. n Trinity Health furloughs, lays off another 1,000 workers By Ayla Ellison T rinity Health, a 92-hospital system based in Livonia, Mich., will lay off and reduce work schedules of 1,000 employees, according to the Detroit Free Press, citing a memo to employees from President and CEO Mike Slubowski. The health system is "losing millions of dollars per day" and needs to reduce costs with the lower revenue base, Mr. Slubowski said, according to the report. "Unfortunately, this requires additional colleague transi- tions — including position eliminations and severances, extended or new furloughs and extended or new reductions in schedules," he said. The job cuts, which began July 1, will primarily affect nonclinical and ad- ministrative positions. They come after Trinity announced plans in April to furlough 2,500 employees. The health system provided an update on its finances in bondholder documents filed June 29. It's projecting operating revenues of $17.3 billion in fiscal year 2021, which began July 1. That's down from $19.3 billion in fiscal year 2019. Trinity hasn't released full-year operating and financial results for fiscal 2020, which ended June 30. During the first nine months of fiscal 2020, Trinity saw revenues decline less than 1 per- cent year over year to $14.2 billion. n

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