Henry Ford Health System is the latest state health care entity to announce temporary layoffs with furloughs to some of its workforce due to economic hardships caused from the COVID-19 pandemic.
The layoffs are taking place this week and were announced today to employees, announced in a system-wide email by Henry Ford’s President and CEO, Wright Lassiter, IIIm according to a release.
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Henry Ford announces layoffs after multi-million dollar loss in March
The six-hospital system announced Wednesday that 2,800 employees will be furloughed due to financial hits from the COVID-19 pandemic.
Approximately 2,800 employees are being temporarily furloughed across the six-hospital system. Those will involve workers not directly involved in patient care, from areas where workloads have been drastically reduced or where operations have been temporarily closed. Employees will keep their healthcare coverage and are eligible for unemployment benefits.
The health system reports a $43 million loss in operating income during the month of March due to the postponement or cancellation of services and procedures, temporary site closures, and an increased need for resources to care for COVID-19 patients, including personal protective equipment for team members. Losses for April and May 2020 are expected to surpass the loss of March 2020.
“I know that news concerning furloughs is painful - especially for an organization like ours, whose greatest strength has always been our people,” wrote Lassiter. “We value each team member’s unique contribution and this decision does not change that. But, we must face these realities head on.”
According to Henry Ford Health System, net operating loss for the first three months of 2020 was $36.2 million, a $75.6 million decrease from 2019’s operating income of $39.4 million. Non-operating losses for the first quarter were $198.3 million, compared to a non-operating income of $81.0 million in the same period last year.
Henry Ford's executives and senior leaders will begin contributing between 10 to 25 percent of their salaries to two funds created to help employees: the COVID-19 Emergency Needs Fund, established during the current crisis, and the Bob and Sandy Riney Helping Hands Fund, established in 2012 by Henry Ford’s President of Healthcare Operations and Chief Operating Officer Bob Riney and his wife Sandy to support employees experiencing unexpected hardship.
As of March 31, 2020, Henry Ford Health System’s net loss was $234.5 million, a decrease of $354.9 million over the same period in 2019.
The company said postponement of non-time sensitive procedures, surgeries and appointments, combined with the temporary closing of several outpatient medical centers has resulted in nearly a 50 percent reduction in patient services revenue for the most recent past week in April, as compared to the prior year.
“Health systems that are caring for a large majority of our region’s COVID-19 patients are clearly carrying a heavier burden,” said Robin Damschroder, Henry Ford Health System Executive Vice President and Chief Financial Officer. “When it comes to federal assistance, we welcome an equitable, metrics-based allocation model that will help organizations like ours continue our mission.”