COVID-19: SLUCare Budgetary Update
May 4, 2020
SLUCare Faculty and Staff,
On April 23, I shared with you that we must take action to respond to the financial impact that the COVID-19 pandemichas had and continues to have on SLUCare. Today, I write to let you know about many of the actions that we intend to take to help address SLUCare鈥檚 financial challenges.
Suspending non-urgent and elective services was the right thing to do to help mitigate the spread of COVID-19, but it has had significant financial consequences for SLUCare. We have experienced upwards of a 70% decline in patient volumes, and if we do not act, SLUCare鈥檚 losses could total more than $13 million by the end of this fiscal year. Our losses in SLUCare are mounting by the day and they are unsustainable. There is a clear and urgent need to act now.
After considering all possible options, we have decided to take the following actions:
- Temporary staff furloughs during May - July, 2020
- Voluntary pay reductions by SLUCare leadership for the remainder of FY20
- Faculty compensation adjustments beginning in FY21
Our decisions were not made lightly but were the product of conversation, collaboration and careful analysis. It is important for you to know that our planning has been guided by a commitment to take no measures beyond what is necessary.
Temporary Staff Furloughs
This week, 130 SLUCare employees in clinical and non-clinical areas will be informed by their chairs or supervisors that they are temporarily furloughed. Comprising approximately 11% of SLUCare鈥檚 total workforce, these employees work in a range of areas within the practice.
Decisions regarding furloughs were made in consultation with chairs and were based primarily on clinical demand and the amount of work available.
For most furloughed SLUCare employees, their unpaid leave begins May 5. We are hopeful that they will be able to return to work no later than July 31. SLUCare leadership will continue to monitor capacity and will redeploy resources where possible to minimize the length of the furlough. It is our intention to bring them back to work just as soon as we are able.
For any impacted employees who are on SLU鈥檚 health insurance plan, their coverage will be maintained during the furlough period, and the University will cover their medical premiums 鈥� excluding vision, dental and other voluntary benefits 鈥� for the duration of their furloughs as well.
Employees also may apply for unemployment benefits, and Human Resources staff will be available to help them navigate this process.
Faculty Compensation Adjustments and Voluntary Pay Reductions
In addition to temporary staff furloughs, there will be compensation changes for SLUCare leadership and faculty. Those actions are summarized below.
- I will take a reduction in pay by an amount determined by Dr. Pestello.
- Many SLUCare clinical department chairs will take a voluntary pay reduction of up to 10% in May and June.
- Starting in July, all faculty salaries, including clinical department chairs, will be reduced 5%, except those faculty who are below the 15th percentile of the AAMC salary scale for their rank and specialty. Faculty salaries will be restored when SLUCare is financially sustainable.
- We will eliminate additive/one-time payments in areas where volume has decreased.
Please note that these actions for SLUCare do not preclude University-wide changes that are part of SLU鈥檚 overall budget response.
As you know, SLUCare is not alone in facing financial challenges due to this terrible pandemic. Medical practices and health care systems here in our region and across the nation are experiencing similar challenges. Many have already announced employee furloughs, and I鈥檓 sure more will follow.
In response to these unprecedented circumstances, we have been required to make very difficult decisions. We deeply regret the impact that our decisions will have on our furloughed employees and their families. I know you will support your colleagues during these uncertain times as we look toward the day 鈥� very soon I hope 鈥� that we can all return and resume the critical work we are called to do.
Thank you for all that you do for our patients, for SLUCare and our University,
Robert Wilmott, M.D.
Dean, School of Medicine
Vice President for Medical Affairs