Trinity Health projects $2 billion less revenue, will lay off more staff

Trinity Health projects the lasting effects of the COVID-19 pandemic will mean $2 billion less in operating revenue in its fiscal 2021, which begins July 1, and is rolling out another round of layoffs and furloughs to compensate.

Livonia, Mich.-based Trinity said Monday it expects to draw $17.3 billion in operating revenue in fiscal 2021, compared with $19.3 billion in fiscal 2019, which ended June 30, 2019. The health system didn’t share a projection for fiscal 2020, which ends June 30. The 92-hospital not-for-profit system, which operates in 22 states, is among the country’s largest.

Trinity, which already furloughed thousands of employees in Michigan as a result of the pandemic, said it will lay off employees and increase the number who are furloughed and have their schedules reduced. A spokeswoman declined to share the number of employees that will be affected.

In an email to staff members obtained by Modern Healthcare, Trinity CEO Mike Slubowski, said Trinity still has more than 600 COVID-19 patients in its hospitals every day, and more than 350 colleagues quarantined at any one time because of the coronavirus. Slubowski said Trinity is losing millions of dollars each day, and doesn’t expect a full recovery in the near future.

In the fourth quarter of its fiscal 2020, which ends June 30, Slubowski said Trinity had to make “very tough decisions” to reduce spending, including eliminating positions, extended or new furloughs and extended or new schedule reductions. Employees affected will be in mostly non-clinical, administrative positions.

“These decisions are being customized to each community we serve based on the related circumstances, including volume growth projections and the cost and revenue challenges in each market,” he said. “These are extremely difficult and painful decisions for our organization but are necessary to ensure that we can continue to fulfill our mission in the communities we serve.”

Trinity’s financial position, like that of its peers, took a massive hit from being forced to suspend elective procedures for months to preserve hospital capacity and slow the spread of the coronavirus. Even though such cases have resumed in many areas, the financial recovery will be far from immediate. Slubowski said financial support from the government helped cover a few months of operating losses but does not provide relief going forward.

Trinity said its operating revenue will stay below historic levels until a COVID-19 vaccine becomes available and hospital and outpatient services are restored to normal levels.

In his letter, Slubowski said Trinity has added a temporary transition window to its severance plan that allows those whose positions are eliminated a 60-day paid, unworked notice period so they can start their job searches right away.

Trinity Michigan announced in April it would furlough about 2,500 employees and cut executive pay. Another 1,500 employees were redeployed to other jobs.


Source: modernhealthcare.com

Tags: covid-19, pandemic

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