Facing deficit of $85 million a month, UVA Health furloughs employees as leaders take pay cuts

Virginia News

CHARLOTTESVILLE, Va. (WRIC) — Facing a deficit of $85 million a month, UVA Health announced a plan Tuesday “to mitigate the financial effects of COVID-19” that includes furloughing employees and having leaders take pay cuts.

Citing a 70% decline in surgeries and 90% drop in clinic visits, the health system said that its decision to reduce expenses was needed to ensure it would have necessary funding.

“These decisions were reached only after a great deal of input from leaders across the organization, and are focused on actions we must take now to be able to fulfill our mission,” Dr. Craig Kent, executive vice president for health affairs for the University of Virginia, said in a statement.

UVA Health provided a list of actions being implemented to cut costs:

  • Expense reduction: Leaders are being asked to find savings where possible in medical supplies and pharmacy spending, along with reducing overtime, limiting work with contract staff and adjusting facility lease commitments. Non-essential travel is being eliminated, and leaders are being asked to reduce discretionary spending.
  • Leadership compensation reductions: Kent will reduce his own compensation by 40% through the end of July. In addition, leaders at UVA Medical Center, UVA Physicians Group, the UVA School of Medicine and the UVA School of Nursing will reduce their compensation by 20% through the end of July.
  • Physician compensation reduction: Physicians will have a 20% reduction in their total compensation through the end of July.
  • Retirement contributions: Retirement contributions will be suspended through the end of July for all UVA Medical Center and non-physician UVA Physicians Group employees.
  • Funding for School of Medicine, School of Nursing and Health Sciences Library: UVA Medical Center and UVA Physicians Group patient care revenue helps support the education and research missions of the School of Medicine, School of Nursing and Health Sciences Library. That funding will be reduced by a yet-to-be-determined amount this year. Each entity will individually make decisions about potential program changes, salary reductions or furloughs.
  • Adjusting hours for patient care staff: Hours for patient care providers at UVA Medical Center and UVA Physicians Group will be adjusted on a shift-by-shift basis based on patient volumes. As patient volumes increase, so too will staffing. Any patient care staff member whose hours are reduced will be able to use their available paid time off. These changes will not affect team members caring for COVID-19 patients.
  • Furloughs for some non-patient care staff: Some non-patient care staff at UVA Medical Center and UVA Physicians Group will be furloughed for up to three months. Health, dental and life insurance benefits will be preserved. Any furloughed employee will be able to use their available paid time off. A special team from the UVA School of Law will provide information and resources for unemployment benefits. Those furloughed may also access UVA’s Emergency Assistance Fund for employees.

“The challenges presented by this crisis are difficult to exaggerate,” Kent’s statement continued. “We have no choice but to take action – now – to stabilize our organization.”

For more coronavirus coverage, click here.

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