Children's Minnesota plans to furlough 181 nurses

Children's Minnesota has a tentative agreement to furlough the equivalent of 181 full-time nurses as the state's largest pediatric hospital struggles with the financial effects of COVID-19.

Surgery cases and emergency-room visits are down significantly at Children's, which announced earlier this week that it would stop offering some medical and surgical services at its St. Paul campus because of a decrease in patients.

Members of the Minnesota Nurses Association will begin voting Friday on the furlough agreement, which would affect about 17% of nurses at the hospital. Children's joins a growing list of prominent health care groups in Minnesota to announce pay cuts and reduced hours for workers in the midst of steep revenue declines because of the shutdown of elective surgeries.

"Everybody knows it's an unprecedented time," said Doreen McIntyre, a nurse who is one of the union leaders at Children's hospital campus in Minneapolis.

"We want to have a hospital to come back and work at," she added. "We want to be able to take care of kids like we've done. … I think people understand the reasoning for it, even though it's difficult."

In March, an order from Gov. Tim Walz indefinitely postponed all nonessential or elective surgeries and procedures to help the health system prepare for an expected surge of COVID-19 patients. One goal was to conserve masks and gowns that have been in short supply for caregivers.

On Thursday, Walz said he's looking to revise the ban on elective surgery in the coming days. The change might help patients who have been anxiously awaiting surgeries while alleviating the financial hit for the health care sector.

The state said 58,333 health care workers applied for unemployment insurance between March 16 and Saturday. The industry's tally is roughly 10% of the statewide total during the period of 584,431 applications.

Last week, Bloomington-based HealthPartners announced its CEO would take a 40% pay cut as the health system said it would furlough about 2,600 workers. This week, HealthPartners said it's seeking voluntary furloughs from some nurses at Methodist Hospital in St. Louis Park.

Earlier this month, the Rochester-based Mayo Clinic said it would cut pay for more than 20,000 people while implementing furloughs, as well.

About 30,000 people at Mayo are facing some type of furlough, clinic spokesman Karl Oestreich said this week. Many furloughs will happen in May, he said, and some will involve nurses in areas seeing a low volume of patients.

At Children's, nurses will take furloughs that stretch for at least four weeks between May and August, said Laurin Cathey, Children's vice president of human resources. To cut costs, Children's also has implemented wage reductions and furloughs among other worker groups including executives, health care providers and nonunion workers, said Jennifer Olson, the senior vice president of system operations.

Children's is projecting a revenue decline of about one-third, or $80 million, compared with previous expectations for the next 90 days, according to a filing this month with bondholders. Compared with January and February, the volume of surgical cases in April is down 82%, the hospital said in the filing, while emergency room visits are down 69%.

"We just don't have the volumes," Olson said. "As we see some of those [elective surgery] restrictions go away, we absolutely expect to see volume come back and we will work with our nurses and our providers to bring people back as we are able."

Children's differs from hospitals for adults, Olson said, because COVID causes relatively few serious illnesses among kids. As of April 13, the hospital had seen only one COVID patient. Even so, Children's converted an entire medical floor in Minneapolis to a negative airflow unit to help care for COVID patients.

While some services have closed at Children's hospital in St. Paul, the medical center's emergency room is open along with its intensive care unit for premature babies. Nurse furloughs will be concentrated, to a degree, in areas of the hospital that have seen bigger declines in patient volumes such as short-stay surgeries.

Beyond reducing labor costs, Children's has reduced capital and discretionary spending, Olson said. It all helps with the budget, she said, but doesn't shed light on exactly what the future might bring.

"It's unlike anything that we've managed before," Olson said of COVID. "With the uncertainty of when will COVID peak and when will maybe a secondary peak come, plus knowing that we have shortages in some critical supplies — its sort of a Rubik's Cube to figure out."