Hospitals cut pay, hours in response to plunging revenue
Oregon's big hospital systems were sitting pretty just three months ago after years of steady growth and profits. But now they're grappling with the sudden monetary fallout of the coronavirus pandemic.
With hospital revenue taking a nosedive, some are securing or dipping into lines of credit from banks for quick cash to help cover costs. Many have cut the pay of top executives and curbed new hiring, travel and other spending unrelated to COVID-19. Next could come demands for wage or benefit concessions from unionized workers, a labor union official predicted.
The moves at Salem Health, the nonprofit hospital and clinic network based in Salem, are typical of the actions so far. In late March, Salem Health took out a $100 million line of credit, said spokesman Elijah Penner. For the March 1-June 30 period, the system expects revenues to fall below budget by $52 million, he said. That's a big dip for a system with typical quarterly revenue of about $200 million-plus before the pandemic.
Another way in which Salem Health typifies the large systems in Oregon: It's keeping some details about its actions secret. Penner says the system has cut the pay of top executives, but won't say whose pay was cut or by how much. CEO Cheryl Nester Wolfe's annual salary was $1.1 million, according to Salem Health's filing with the Internal Revenue Service last year.
And, like the other big Oregon hospital systems, Salem Health has a big security blanket: An investment portfolio that totaled about three-quarters of a billion dollars prior to the stock market turbulence induced by the pandemic.
Hospitals hold back on layoffs, furloughs
By and large, Oregon's large hospital systems have not laid off nurses or forced them to take unpaid time off during the pandemic, said Kevin Mealy, spokesman for the Oregon Nurses Association, which represents about 15,000 nurses at hospitals across the state. But the systems have cut back sharply on the number of optional hours they offer workers, he said. For example, Mealy said, a nurse who is contractually guaranteed 20 hours of work a week but has typically been offered as many as 16 additional hours a week has seen those extra hours evaporate as hospitals try to save money.
This Lund Report story is shared as part of a local media project to increase COVID-19 news coverage.
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