Samaritan Health Announces Restructuring and Other Operational Changes Amid Continued Disruption of Patient Volumes and Revenue Due to COVID-19 Crisis
Published on: September 10, 2020
Financial impact of coronavirus pandemic necessitates layoffs of 51 employees, and the reorganization of various departments and services to ensure financial sustainability of region’s largest healthcare system
Watertown, N.Y. – As the economic fallout from the COVID-19 crisis continues for healthcare systems regionally and nationwide, Samaritan Health leadership has been compelled to make the difficult decision to lay off 51 employees effective September 10, 2020. In addition, 44 open positions will not be filled for a total of 95 impacted positions. Several Samaritan health services will also be restructured to increase operational efficiencies and respond to lower patient volumes.
Twenty-one employees originally placed on furlough in April will have their furlough extended. Samaritan leadership aims to call those furloughed employees back to work when patient volume and operations stabilize.
It is important to note the hospital is still hiring for a number of critical positions and many of the impacted employees will have the opportunity to apply for these 200 open positions. Samaritan’s Human Resources team will be working with those employees to help fill these roles. If a different position within the healthcare system is not possible, Human Resources will coordinate with the New York State Department of Labor to provide outplacement assistance.
Staff members impacted who do not find another position within the organization will be offered a severance package based on years of service. The positions affected span several departments, from nursing to senior leadership.
The staffing changes will result in a $5 million cost reduction from salaries for the healthcare system, which faces an anticipated $10 million revenue shortfall for the year. While cost savings are part of the plan, Samaritan will also pursue pending, revenue-generating opportunities to help the overall budget shortfall.
The shortfall is a direct result of the COVID-19 pandemic, which resulted in patient volumes dropping by as much as 40 percent at certain points throughout the year, higher costs for PPE and testing, among other unanticipated expenses. The pandemic has caused patients to fear coming to the hospital for services and many have delayed care as a result.
As a community, we have made significant social changes in our lives. Schools are reopening extremely cautiously, and the economic recession has left many unemployed and in some cases without health insurance. Samaritan has also been preparing for a possible second wave of COVID-19 cases as we enter the fall. All of these factors have translated to a challenging financial situation for all healthcare systems.
In addition, federal CARES Act relief provided to Samaritan was much less than expected, as the organization missed out on the initial round of rural funding, and proportionately far less than others in the region. Samaritan also did not receive Paycheck Protection Program funds, another pocket of CARES dollars, due to being designated an urban area and employing more than 500 people.
“Prior to 2020, Samaritan experienced a decade of uninterrupted growth in revenue and services. However, the drastic negative impact of the COVID-19 pandemic on patient volumes and revenue has necessitated the difficult measures we’re taking to ensure the continued financial viability of our healthcare system,” said Tom Carman, president and chief executive officer. “Healthcare systems everywhere are facing the same financial constraints driven primarily by fewer patients. We recognize the important role Samaritan plays as the largest private employer in the community, with more than 2,300 full-time employees, and it’s our intention to place the interests of our patients and our broad employee base first as we continue to weather this challenge.”
The following measures have been implemented to help stabilize the financial burden Samaritan faces, gain operational efficiency and adhere to COVID-19 restrictions:
- The Cardiopulmonary Rehabilitation Program and Adult Day Health Care remain temporarily suspended, until spacing regulations and other COVID-19 restrictions are lifted
- Samaritan’s Transportation Department will be eliminated. Samaritan will engage local, third-party vendors to transport long-term care residents for medical care off-site
- The consolidation of the Sackets, Lacona and Cape Vincent clinics into other existing larger clinics will remain intact until the end of the year, when that measure will be reassessed. LeRay Family Health Center has re-opened and providers are seeing patients in their existing space, though radiology services at this location will cease
- LeRay Urgent Care will permanently close effective Sunday, September 13, but all providers and staff will be relocated to other primary care locations, where Samaritan will offer more same-day appointments and will accept more new patients, including at the LeRay Family Health Center located in the same building
- Lab Service Centers at Orthopaedics and Neurology will remain closed. Patients can access these services at other community-based locations.
Many of the cost-saving measures initiated in April will also continue, including:
- The 15-percent pay cut for all senior management positions
- Deferment of all merit increases for management staff
- Suspending new capital construction projects that are not revenue-generating and limiting capital purchases to emergency projects or supplies
“We have long believed employees to be our strongest asset,” said Carman. “These decisions were not made lightly, and all measures taken reflect our best efforts to sustain the viability of this important healthcare system for years to come. Our commitment to patient care has not wavered and we look forward to the day when the national and local economic situation allows us to resume our full, comprehensive slate of quality services.”