KALAMAZOO — Bronson Healthcare will furlough staff and cut executive pay 25 percent in response to the financial effects of the COVID-19 pandemic.
Furloughs “will be implemented over the next few weeks for several hundred mostly non-clinical employees. The furloughs are expected to be for 16 weeks, however, some employees may be called back sooner as their areas ramp back up,” the Kalamazoo health system said today in a statement.
Several health systems have taken similar steps after dramatic declines in revenue because of an executive order that required care providers to cancel non-essential surgeries and procedures, plus significantly higher expenses for supplies and personal protection equipment for staff.
Bronson said predictive models indicate Southwest Michigan “may experience ongoing community spread of COVID-19 into the fall rather than an overwhelming surge this spring, assuming responsible social distancing continues after the governor’s order expires.”
“We are working to adapt to continuing COVID-19 care while still safely serving all of our patients. We are starting to ramp up surgeries and other procedures within the scope of the Governor’s order with a goal of having our hospitals back to 100 percent by September and our practices, many of which have been doing video visits, at 100 percent by August,” President and CEO Bill Manns said. “If we can do it sooner, we will. However, the availability of enough PPE to ensure the safety of our staff and patients in all settings continues to be a limiting factor.”
The Michigan Health and Hospital Association estimates that in the last two weeks of March, after Gov. Gretchen Whitmer’s issued an executive order for care providers to postpone or cancel non-essential surgeries and procedures, member hospitals across the state lost more than $600 million in combined net patient revenue from the pandemic.
The lost revenue from the pandemic is on top of losses in their investments and an estimated minimum $150 million that hospitals in Michigan spent on unbudgeted expenditures “in a very short time,” MHA CEO Brian Peters told MiBiz.
To cut expenses, Bronson is reducing the CEO’s salary by 25 percent and implementing pay cuts “at decreasing percentages proportionate to salary levels for all Bronson executives and Bronson leaders through Aug. 15,” the health system said. Bronson also suspended contributions to employee retirement accounts.
Bronson is proceeding with major projects now in development, including seven offices for Bronson Primary Care Partners that will open July 1, a new lab at Bronson Methodist Hospital opening in late July, and the Bronson Cancer Pavilion in Kalamazoo and a new Bronson South Haven Hospital that are targeted to open in early 2021.