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Connecticut Children’s furloughs 400 as surgeries are postponed with the deepening COVID-19 public health crisis

Hartford Courant - 3/31/2020

As the COVID-19 public health crisis deepens, Connecticut Children’s Medical Center is furloughing 400 across its health system including its flagship hospital in Hartford as elective and other surgeries are delayed, causing patient volumes to tumble by half at a cost of millions of dollars in revenue.

The health system also is eliminating 31 positions as part of a restructuring that began before the virus outbreak, an initiative the health system says it expects will save $20 million a year in operating costs.

All but a handful of the furloughed employees – about 14% of them physicians and nurses – are working a reduced work week from their homes. All the furloughed employees are expected to return to their regular posts, perhaps by early June, hospital officials said Tuesday.

“Because the volume is down, there’s just not the work activity for many of our employees,” James E. Shmerling, president and chief executive officer at Connecticut Children’s, said. “We felt the safest and most prudent thing to do was ask those people who weren’t essential to maintain clinical and hospital operations to stay at home.”

The furloughs represent about 14% of Connecticut Children’s total workforce of about 2,800.

Shmerling said the furloughed physicians and nurses are often conducting “telemedicine” appointments through the computer. Others have been reassigned to other duties, he said.

Connecticut Children’s hasn’t had the volume of patients with COVID-19 symptoms, though it has had a dozen or so. The health system also is offering to accept children from other hospitals to free up more beds for adults infected with the virus, Shmerling said.

The dramatic downturn in patient volumes at Connecticut Children came just as the health system had seen a jump from 54% to 67% in the health system’s share of Medicaid patients. Medicaid only reimburses a portion of the cost of the care that is provided.

The decline in the number of patients in the COVID-19 outbreak will cost Connecticut Children’s between $7.5 million and $9 million a month in revenue, Shmerling said.

“So that kind of lost revenue plus the challenge of a large Medicaid population puts significant challenges on the organization,” Shmerling said. “These two things hitting at the same time was a like a tsunami, pretty swift action.”

The elimination of the 31 jobs – just over half of them management positions – accounts for up to $4.5 million of the $20 million in annual savings.

“This was a last resort,” Shmerling said. “We had already reduced costs in a number of areas in the hospital. We had renegotiated some of our pharmaceutical contracts. We probably cut our costs before we got into the labor issues around $10 or $15 million.”

Shmerling said doctors have not been asked for a pay cut but the top 20 managers at the health system – including Shmerling – will take a 20-percent cut in salary for the remainder of the year.

For furloughed employees, Connecticut Children’s has established an employees assistance fund, with some physicians having already raised funds. Doctors also are donating sick times and personal time off. Donations also are being sought.

“So if someone is having difficulty making a payment or buying groceries, they’ll be an assistance fund for them,” Shmerling said.

The health system’s human resources department also has established an employee hotline that will be answered 12 hours a day, five days a week.

Shmerling said the number of furloughs will be reviewed weekly to see if more workers need to be called into the office.

The elective surgeries were delayed not canceled, and they will be rescheduled.

“So I expect our surge to be over the summer, and we expect to get real busy again,” Shmerling said.

Kenneth R. Gosselin can be reached at kgosselin@courant.com.

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