COVID-19 fallout: HealthPartners to furlough 2,600 workers

HealthPartners is furloughing 2,600 workers in the latest sign that financial shocks from COVID-19 are hitting hospitals and clinics along with the rest of the economy.

Chief Executive Andrea Walsh is taking a 40% pay cut, according to a Thursday announcement from HealthPartners, while other executive leaders will see compensation cut by 30%.

The Bloomington-based nonprofit group operates seven hospitals, dozens of clinics and a large health insurance business. It's the latest in a series of prominent health care groups in Minnesota to announce furloughs and pay cuts as a statewide halt to nonemergency surgeries saps revenue.

"The ongoing COVID-19 pandemic is creating unprecedented challenges, ones we couldn't have imagined just a few months ago," Walsh said in a statement. HealthPartners has seen "an immediate and significant decrease in revenue," according to the statement.

Despite the financial pain, Walsh and other health care leaders in recent weeks have said they still support decisions in March to stop elective and nonemergency procedures in order to conserve needed supplies for an expected surge of COVID-19 patients.

The surge of those patients hasn't come as quickly as hospitals originally expected, leaving medical centers relatively empty as they prepare for the public health emergency.

The Minnesota Hospital Association said hospitals across the state are projecting a financial hit of $2.9 billion over the next 90 days due to COVID-19. Dr. Rahul Koranne, the association's chief executive, said the figure takes into account three financial factors: a huge revenue hit from postponed procedures; new revenue from treating COVID-19 patients; and $1.2 billion in new expenses to prepare spaces, staff and supplies for the pandemic.

Hospitals are committed to making the investments, Koranne said, and have supported delaying procedures in order to conserve scarce quantities of masks, gowns and face shields.

"If you walk through a surgical area of a hospital right now, you would see a lot of empty beds," Koranne said in an interview earlier this month. "On average, health care systems are reporting a 55% reduction in patient revenue. In some rural organizations, smaller hospitals, are reporting up to 70% revenue reductions."

HealthPartners is the second-largest nonprofit group in the state, with about 26,000 total employees and revenue last year of $7.25 billion. Earlier this month, the Mayo Clinic, which is Minnesota's largest nonprofit group, announced pay cuts for more than 20,000 workers.

Minneapolis-based Allina Health told the Star Tribune last week that it's asking 10,500 workers to take furloughs or use paid time off. The health system operates 11 hospitals and dozens of clinics. This month, Allina temporarily closed 18 clinics and fully closed two others as patients seek care through online options rather than visit medical offices.

Robbinsdale-based North Memorial Health told the Star Tribune last week it had "recently started furloughing employees" but didn't say how many workers were impacted.

Minneapolis-based Fairview Health Services, which has asked some physicians to volunteer for furloughs, said it's currently delaying procedures for about 4,000 patients each week. In a statement to the Star Tribune on Monday, Fairview said the delays translate into weekly revenue loss of $30 million.

At HealthPartners, furloughs will be limited to parts of the company where work has stopped, slowed or been deferred temporarily. Furloughed employees will retain health benefits; the health system didn't say how long furloughs would last. HealthPartners has put a hold on hiring, as well, and is eliminating most open positions.

To conserve personal protective equipment and slow the spread of disease, HealthPartners executives say they have reconfigured their network of clinics to create four sites that are dedicated solely to patients with COVID-19 symptoms. Patients who visit all clinics are being asked a series of screening questions and being redirected accordingly, said Dr. Beth Averbeck, the senior director for primary care at HealthPartners.

HealthPartners has temporarily closed some clinics while expanding the use of video and phone visits for patients.

"Primary care has accelerated the path we were previously on around telehealth and taking care to where the patient is — and not asking the patient to come to where we are," Averbeck said in an interview last week. "This will contribute to whatever our new normal is going to be, after we get through the pandemic."

Christopher Snowbeck • 612-673-4744