Calm before storm continues to roil Duluth hospitals with more layoffs, furloughs

Essentia Health has started furloughing clinical staff and added another month of leave for the 500 administrative employees that were cut at the start of the month.

"Colleagues in both medical and business roles are having their hours flexed to meet patient volumes and reduced business functions," spokesman Louie St. George III said in a statement. "Physicians and executive leaders are seeing notable reductions in their compensation as well. To reduce costs, we have streamlined and restructured some leadership roles and eliminated others."

Minnesota Nurses Association spokesman Rick Fuentes said Thursday morning the union is negotiating with the health system over staff reductions.

St. Luke's has seen a "dramatic decrease in patient volumes in all clinical areas," CEO Kevin Nokels said in a statement, as elective surgeries have been postponed and nonessential appointments have been moved online or canceled under a state order. As a result, hospital revenue has dried up around the state. The Minnesota Hospital Association predicts state health systems will lose $2.9 billion over the next three months.

"Typically with a significant and extended decline in patient volumes we would immediately reduce staffing," Nokels said. "We are planning for an increase in patients while continuously monitoring patient volumes and needs and are adjusting our staffing as appropriate."

St. Luke's initially cut seven employees and was looking to reduce hours for others.

Neither of the Duluth-based health systems offered a specific number of employee reductions that have been made in recent weeks.

The health system, Duluth's largest employer, publicly announced last month it would put 500 employees on special administrative leave, which will now last through the end of May.

When those employees come back could depend on the timing of the expected surge of COVID-19 patients.

"We know in the very near future it's going to be all hands on deck," said St. Luke's Chief Medical Officer Dr. Nicholas Van Deelen, and by reducing staff now the hospitals will be better financially equipped to deal with an influx of patients.

Locally, the surge is expected between May and July.

"Both when the peak occurs and how severe it will be is unknown," said Dr. Jon Pryor, president of Essentia's northeastern Minnesota and northwestern Wisconsin operations.

Of Minnesota's 1,912 confirmed cases of COVID-19 and 94 deaths, St. Louis County has had 44 cases and six deaths as of Thursday. Nearby Carlton County, with a fraction of the population of its northern neighbor, now has 29 confirmed cases and no deaths.

No new cases have been reported in Wisconsin's Douglas County in several weeks. There have been seven confirmed cases there and no deaths.

Both Essentia and St. Luke's recently received $3 million from the state to boost COVID-19 preparation, part of $50 million in statewide Department of Health grants.

Brooks Johnson • 218-491-6496