Banner Health to Impose Pay Cuts and Furloughs

By on April 22, 2020 0 713Views

Phoenix-based Banner Health, which is Arizona’s largest private employer, will impose “short-term” furloughs and pay cuts for some employees, company officials confirmed Monday.

Other major hospitals and hospital systems have announced similar cost-cutting reductions for employees in response to changing economic conditions and state policies related to COVID-19.

Banner Health, which has approximately 43,000 employees in Arizona, is starting the furloughs this week. The nonprofit company anticipates that the measures will affect 5% to 7% of its workforce, or up to 3,000 Arizona employees. The company says the furloughs are temporary and employees will be eligible for unemployment benefits, including an extra $600 per week provided by Arizona via the federal CARES Act.

“This program is being implemented based upon workload and, while on this status, team members will have their medical, dental and vision benefit premiums paid in full by Banner,” the company said in a statement. “For many team members, this may be just be two weeks long as we anticipate work may increase in many areas in the coming weeks.”

While Banner said some employees are extremely busy addressing the COVID-19 pandemic, elective surgeries and non-life-threatening procedures are on hold, which for some health care workers means fewer patients and a reduction in work.

All senior leaders, including senior vice presidents, presidents, vice presidents and CEOs, will take up to a 20% reduction in pay beginning in May, Banner said. The company employs a total of 52,000 people across six states.

“We are doing our very best to be nimble, responsive and supportive of our team members’ needs as conditions rapidly change during the COVID-19 pandemic,” a company statement says.

In addition to furloughs, Banner has made the following financial changes related to COVID-19:

  • The company will pause hiring for most non-clinical, non-revenue-generating positions across the organization. This includes newly created jobs as well as vacant roles in the corporate office and facilities. The company will continue to post and recruit for – positions that are essential to meet the needs of COVID-19.
  • Members of Banner’s senior leadership team have contributed $100,000 to the Banner Health Foundation’s Supporting our Staff Fund to provide financial support for team members who may need it during this time, officials said.
  • Banner team members who have and continue to contribute to the direct care of COVID-19 patients will receive a one-time bonus to be awarded in July. This award will be based upon hours worked with COVID-19 patients in March, April and May.
  • The company is prioritizing reassigning employees with reduced work to other duties. To date the company says it has redeployed more than 1,500 employees to jobs outside their normal scope of work to support COVID-19-critical needs.
  • The company is offering a voluntary sabbatical of a month of unpaid time off to some employees. A total of 376 employees were participating as of Monday.
  • Arizona Gov. Doug Ducey’s executive orders halting elective surgeries, expanding hospital bed capacity and requiring non-essential workers to stay at home have affected routine medical care across the state. Also, hospitals have had to spend money on preparing to care for COVID-19 patients, including expanding their bed capacity by 50% by April 24.

Many health providers claim COVID-19 preparations, combined with decreases in emergency room visits and patient visits overall, have resulted in massive revenue losses.

The Mayo Clinic, which has health facilities in Minnesota, Florida and Arizona, announced last month that after April 28, “temporary furloughs of some staff and salary reductions will be required.”

The health system said that halting elective surgeries — something Mayo began prior to Ducey’s order — was the right decision, but that it eliminated most revenue at a time when Mayo is making investments to develop and expand testing, conduct research to help stop the pandemic and realign facilities and care teams to treat patients ill with COVID-19.

An analysis by the Arizona Hospital and Healthcare Association shows Arizona hospitals are reporting revenue losses of 30% to 40% because of the cancellation of elective procedures and a reduction in emergency department visits. Statewide, that is a revenue reduction of $430 million to $575 million per month.

The hospital association has asked Ducey to relax his executive orders on halting elective surgeries and on expanding hospital bed capacity, citing recent modeling projections that indicate Arizona will not be as hard-hit by the disease as previously was predicted.