Cape Girardeau hospitals take steps to cope with coronavirus costs

Saying they are “squarely in the center of the COVID-19 pandemic,” Cape Girardeau’s hospitals are adjusting staffing schedules, wages and employee benefits in an effort to mitigate revenue losses caused by the outbreak.

“We are doing the best we can to manage patient volumes and costs,” according to a statement released Wednesday by Southeast Hospital and the SoutheastHEALTH system.

At Saint Francis Medical Center, the situation is much the same.

“Hospitals across the country are experiencing a sudden and dramatic decline in patient care activity,” said Maryann Reese, president and chief executive officer of Saint Francis Healthcare System.

The coronavirus outbreak has forced virtually all of the nation’s hospitals to cancel or postpone elective procedures as well as other inpatient and outpatient activities and reallocate equipment, supplies and manpower to their coronavirus responses.

“Hospitals, beginning in March, eliminated their elective procedures, which are fairly lucrative components of hospital business,” Dave Dillon, spokesman for the Missouri Hospital Association (MHA), told the Southeast Missourian. “And what we have seen subsequently is that, on average, hospital outpatient business has dropped by about 60% and inpatient care has dropped by about 40% statewide.”

MHA estimates Missouri’s 154 hospitals are losing about $32 million per day because of coronavirus.

“That’s just under a billion dollars a month,” Dillon said.

“Most hospitals operate on a fairly small margin,” he said. “To effectively serve their communities, hospitals have to have 2 to 4% margins to reinvest in their infrastructure. This (the cost of coronavirus care) has many hospitals, if not all hospitals, upside down.”

Staffing

With a combined workforce of several thousand employees, Saint Francis and Southeast are among the region’s largest employers. Just as they are at most hospitals, employees are the largest component of the operating costs at both Cape Girardeau hospitals.

“There have been hospitals that have announced furloughs and layoffs throughout the state,” Dillon said. “Hospitals have to keep that on the table as one of their options and make the decision of whether they can afford their staff.”

However, both Southeast and Saint Francis say they are doing all they can to avoid staff reductions.

According to Reese, Saint Francis is “committed to not laying off colleagues and maintaining their benefits,” choosing instead to reassign staff to new roles and adjusting staff hours to accommodate patient volumes.”

“Staff are also taking off a week at a time, alternating weeks to cover work responsibilities,” she said. “Flexing and job sharing enables colleagues to remain employed, continue to receive existing benefits like health insurance and have a defined plan to return to work.”

The staff scheduling adjustments also “allows colleagues to apply for unemployment benefits” if necessary, she said.

In addition to work schedule adjustments, Reese said members of the Saint Francis executive team and Saint Francis Medical Partners “have taken a voluntary, temporary pay reduction, ranging from 10 to as much as 50% to lessen the financial burden on the organization.”

At Southeast, patient volumes are “down 30 to 40% due to postponing elective surgeries and procedures,” according to a statement from the health care system.

“In addition, many patients have canceled nonemergent office visits with our providers,” the statement continued. “Experts are also predicting significantly higher unemployment, which will lead to higher volumes of uninsured patients.”

To help avoid employee layoffs, Southeast is reportedly taking several actions, including suspension of all employer-sponsored retirement contributions for one year, effective May 15, and elimination, where possible, of all contracted labor, consultants and sponsorships.

Southeast is also reducing its marketing expenditures and is asking employees to use their PTO (paid time off) rather than accumulating multiple weeks of vacation time.

In the hospital’s statement, Southeast president and CEO Ken Bateman said his goal, “to every extent possible,” is to “protect our employees’ jobs, current wages and their health benefits.”

Financial help

Some financial relief for Missouri hospitals was included in the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act approved by Congress in late March. The bill provided $100 billion of financial aid for the nation’s health care system, of which $618 million has been funneled to health care providers in Missouri.

Roughly half of that amount has been allocated to the state’s hospitals and, according to MHA, the formula used by the government to determine the amount individual hospitals received was based on each facility’s Medicare reimbursement history.

Dillon said MHA and other hospital associations are “advocating strongly” for additional federal support for the nation’s health care system.

“We have a fairly sizable hole to crawl out of,” he said.

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