LMH furloughs more than 220 employees as it deals with declining revenues related to pandemic
photo by: Chris Conde
Updated at 12:15 p.m. Monday
More than 220 LMH Health employees will temporarily be losing their paychecks as the hospital struggles to deal with revenue declines of more than $1 million per week since the pandemic began.
LMH confirmed Monday morning that it has notified 221 employees that they will be furloughed for various periods while the nonprofit hospital works to deal with revenue shortfalls largely caused by the pandemic-related decision to temporarily stop all elective surgeries and treatments at LMH.
“As a nonprofit community hospital, LMH Health provides care for all, regardless of ability to pay, and it’s important that we work hard to protect our ability to do so,” Russ Johnson, president and CEO of LMH Health, said in an emailed statement. “The steps we are taking are meant to keep our hospital strong while ensuring that, to the best of our ability, our employees continue to receive income and benefits during this challenging time.”
As furloughed employees, the affected individuals will be able to keep their health insurance and other benefits from LMH. They also will be able to file for unemployment benefits from the state, even if their furlough period lasts for just a few days, LMH spokeswoman Amy Northrop said.
LMH said 52 employees would be furloughed for one week, 77 for two weeks and 92 for more than two weeks. Those 92 employees haven’t been given a definite time period for when they will return to work, Northrop said.
Some of the furloughs began on April 27. The Journal-World began asking the hospital about furloughs on Friday after hearing rumors that the hospital was providing employees with notices. LMH confirmed the furlough program Monday morning.
Northrop said it is uncertain when some of the furloughed employees will be allowed to return to work. She said the timeline largely depends on how quickly and safely the hospital is able to restart elective procedures. LMH announced last week that some of those procedures would begin this week. But on Monday, Northrop cautioned that it will be a slow process.
“It won’t be a mad dash like a Black Friday run to get your TV,” Northrop said of any surge in procedures.
She said the hospital still would be evaluating patients on a case-by-case basis and may be asking some patients to wait “just a bit longer.” She said it was unlikely the hospital would be able to do its normal volume of procedures as long as special pandemic requirements, like social distancing and extra cleaning measures, are in place. Northrop said hospital leaders also are prepared to put a halt to elective surgeries again, if COVID-19 cases warrant it.
“Thankfully, there hasn’t been a spike, but the number of positive cases is still going up,” she said. “If we have to pull back and be more conservative, we will.”
The 221 employees are about 14% of the hospital’s full-time and part-time workforce of 1,572. Of the 221 employees, the vast majority hold clinical health care positions rather than administrative positions. Northrop said via email that 179, or about 80%, of the furloughed positions were “clinical professionals across all areas of LMH.”
A separate program, however, is in place for “directors, managers and senior leaders” to reduce their pay. Since March 30, those employees have “started voluntarily reducing their work hours by 25%,” according to a statement from LMH. Nonclinical support areas — everything from finance offices to human resource employees — also are adjusting staffing hours downward by 25%. Employees can choose to have their paychecks reduced by 25%, or can take paid time off to account for the difference, if they have paid time off remaining.
Unlike some employers in the state, LMH is not requiring that employees use all of their paid time off before being able to access unemployment benefits. State law does not require furloughed employees to use all of their paid time off in order to be eligible for unemployment benefits. But the state law does allow employers to require that through their own workplace policies.
While LMH does not require furloughed employees to use all their time off, many employees have largely exhausted their paid time off because of a previously implemented workforce reduction program.
LMH previously announced that all employees at the hospital were subject to flex staffing, which means they may be required to reduce their hours if hospital demands in particular departments warranted it. Those type of cuts in hours have been common at LMH once elective surgeries and other outpatients procedure were placed on hold.
Northrop confirmed the hospital has had employees exhaust all of their paid time off, including sick leave, as a result of those reductions in hours.
Northrop said hospital leaders were developing ways to work with employees, especially those who may have used all their sick leave, to ensure that they have appropriate time off once they return to work. She said some longtime staff members, who have accumulated large amounts of PTO, have donated paid time off to employees who have exhausted their balances.
“And our HR staff is working with people on a case-by-case basis,” Northrop said. “We’re just taking an approach of seeing if we can meet the need because we understand we’re all facing unknowns right now.”
The decision to temporarily halt nearly all outpatient and elective procedures has reduced cash flow at the hospital by about $1.7 million per week. Outpatient procedures account for more than 80% of the hospital’s overall revenues. The hospital also is receiving less cash because of a decision in April to temporarily halt all debt collection and copays from patients in an effort to ease some of the financial pressures on patients.
The statement from the hospital said LMH was “providing special consideration for associates who are lower wage earners and more vulnerable to economic hardship.” The LMH Health Foundation, the nonprofit endowment of the hospital, has boosted its CARE Fund, which can assist employees with needs such as rent, utility payments and other household and living expenses.