Local hospitals furlough employees to cope with COVID-19 financial hit

Not only are stores, restaurants, and service businesses feeling the pinch of COVID-19, but even major hospitals in the Seattle area are suffering financially — and that means they’re having to furlough employees.

MultiCare Chief Physician Officer Dr. David Carlson said the Tacoma-based medical system is having to furlough approximately 6,000 employees for 17 days.

“What we’ve asked people to do is take 17 days of either furlough or paid time off between now and the end of the year,” he said. “In essence, that means one day per pay period.”

He said furloughing those employees now would prevent a tougher cost-cutting decision later.

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“Really, the notion is that if we didn’t do that, we would wind up laying a lot of people off,” he said. “We believe that doing this is so much better for our community, our employees.”

UW Medicine announced earlier this week that “reductions in the salaries for senior leaders, staff furloughs, and tight controls on spending” would be the result of a projected $500 million financial loss over the next few months.

On the Eastside, Overlake Medical Center has also had to furlough 150 employees, asking them to take PTO, if possible. Overlake CFO Andrew Tokar said this was done as an alternative to layoffs.

“We don’t want to lose our workforce — that’s the most important thing to us here as we move through this pandemic,” he said.

There are a few different factors contributing to the financial difficulties hospitals and clinics are facing right now. For one, Tokar said, due to supply and demand, the cost of personal protective equipment skyrocketed when the crisis began.

“A surgical mask might cost 30 cents and now we’re paying a dollar,” Tokar said. “And that might not seem like a lot, but when you’re buying 20,000 of them at a time, it really starts to add up.”

Even bigger was the loss of revenue when the state put a stop to elective surgeries. Tokar said temporarily halt those surgeries meant between 30 and 40 percent reduction in revenue.

And, as Carlson said, it was not just elective surgeries that hospitals missed out on — there were plenty of medically necessary visits, scans, tests, and operations that did not happen.

“Many other things stopped as well, and I think largely out of fear,” he said. “People who were sick and they normally would come to an office or an urgent care stopped coming.”

As an example, he said, there was a 60 percent drop in cancer diagnoses at MultiCare facilities over the past month.

“We know that the rate of cancer didn’t go down,” he said. “But the diagnosis of it did because people were afraid to come in, or their providers were afraid to care for them.”

Tokar noticed the same thing in the Overlake system.

“Individuals are probably just a little more hesitant at times to walk into a facility with just all the unknowns that are out there relative to this disease … I would have to expect that did play a hand or a part in the lower volumes that we’re experiencing,” he said.

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