Faced with $10M shortfall, Samaritan lays off 51 workers, makes other cost-cutting changes

Updated: Sep. 10, 2020 at 5:07 PM EDT
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WATERTOWN, N.Y. (WWNY) - Watertown’s Samaritan Health announced Thursday it laid off 51 employees and made other cost-cutting changes “as the economic fallout from the COVID-19 crisis continues for healthcare systems regionally and nationwide.”

“It ranges anywhere from nursing, to senior leadership, to management, to those that have been impacted by lower patient volume, to really across the board,” said Leslie DiStefano, Samaritan’s director of communications and public relations.

In addition to the layoffs, Samaritan will leave open positions unfilled, keep workers on furlough, close or consolidate clinics, and eliminate a department.

In a news release, officials said 44 open positions will not be filled for a total of 95 impacted positions.

Another 21 workers placed on furlough in April will have their furlough extended. Officials said they plan to call those furloughed employees back to work when patient volume and operations stabilize.

Several Samaritan health services will also be restructured to increase operational efficiencies and respond to lower patient volumes.

Samaritan said it’s still hiring for a number of “critical positions” and many of the impacted employees will have the opportunity to apply for 200 open positions.

“I think that’s really important as well, that there perhaps is some movement for those laid off employees to go into other positions," DiStefano said. "And, of course that’s something that we want to do. We want to keep them in the organization.”

Samaritan’s human resources team will be working with affected employees to help fill those jobs. If a different position within the healthcare system is not possible, HR will coordinate with the New York State Department of Labor to provide outplacement assistance.

Affected staff members 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 said it will also pursue pending, revenue-generating opportunities to help the overall budget shortfall.

Officials said 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,” officials said in a news release. “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 certain points during the pandemic, when we were looking at 40 percent reduction in patient volume,” DiStefano said. “So people not coming in to see their doctors, not coming in to the emergency department. That’s a major, major reduction. And, we still are seeing that.”

In addition, Samaritan said federal CARES Act relief it received 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 in a prepared statement. “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.”

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