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Healthcare

EXCLUSIVE-Tenet furloughs 10% of workforce due to coronavirus cutbacks

April 15 (Reuters) - Hospital operator Tenet Healthcare Corp has put around 10% of its workforce on furlough due to a reduction in elective surgeries and other services brought about by the coronavirus outbreak, according to a letter sent to employees on Wednesday.

Employees on furlough include those in certain administrative support jobs and corporate office jobs as well as healthcare workers involved in elective care procedures such as knee replacements and routine colonoscopies.

“All of our ambulatory centers and certain hospital units which were not needed for this crisis have been closed or significantly ramped down,” Tenet Chief Executive Officer Ron Rittenmeyer said in the letter reviewed by Reuters and reported here for the first time.

“While we are concerned for the COVID-19 patients we are caring for across our system, we are equally concerned for our other patients who must now wait to receive medically necessary procedures.”

He said the furloughs will have no effect on care for COVID-19 patients, or any other emergency or medically necessary care at Tenet’s hospitals.

Dallas-based Tenet operates 65 hospitals and about 500 other healthcare facilities, including ambulatory surgery centers.

Several states, including New York, New Jersey and Washington, have required hospitals to halt lucrative elective surgeries in order to focus on expanding capacity for intensive care for patients infected with the new coronavirus.

The U.S. death toll from COVID-19, the highly contagious respiratory illness caused by the virus, topped 25,700 on Tuesday, out of more than 600,000 known U.S. infections, according to a running Reuters tally.

Hospital administrators said high-margin services, such as orthopedic and heart procedures, can account for up to 80% of revenue, while infectious disease and intensive respiratory treatments are less profitable.

Tenet earlier this month withdrew its previously announced outlook for first quarter and full-year 2020 financial results, citing continued uncertainty due to the outbreak.

The American Hospital Association earlier this month warned of “a historic financial crisis” at U.S. hospitals, where “virtually all regular operations have come to a halt ... causing major cash flow concerns that threaten the viability of hospitals.”

Tenet said it will continue to cover healthcare insurance premiums for furloughed employees, who will be eligible for unemployment benefits. The company also has a fund for employees who have experienced hardship.

Rittenmeyer said he would donate 50% of his April-June salary to that fund, while other Tenet executives would donate 10-20% of their salaries.

“We remain ready to resume vital elective care in our communities once government restrictions are lifted,” the CEO said. (Reporting by Deena Beasley; Editing by Christopher Cushing)

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