Dear Colleague:
No doubt, most of us are experiencing the anxiety, stress and uncertainty the coronavirus disease 2019 pandemic has unleashed. Businesses large and small, families, churches, schools, government entities and healthcare organizations are each struggling in various ways with the sudden and traumatic changes imposed on our economy and our families.
As Ballad Health has planned and implemented our response, we have done so with the safety and well-being of our team members, partners and community in mind. We have taken aggressive steps to bolster our PPE, limit exposure within our facilities, provide real-time information and updates to our team members and the public, conduct testing beyond what has been seen in most other places in the nation, and extensively plan for what could be an eventual surge in volumes related to COVID-19.
In addition to these steps and more, we moved to comply with the President’s and Governors’ recommendation to limit elective procedures in our facilities – virtually bringing our business to a halt. This move has not only negatively affected our hospitals and other points of care, but has also had an extraordinary effect on physician groups throughout the region and nation.
Over the past two weeks, a cascade of familiar health systems across the country have taken steps to address the current reality that there is not enough patient volume to support the current healthcare workforce. Particularly in non-urban and rural communities, but even in urban areas of economic prosperity, many systems are implementing a variety of actions to mitigate the impact, ranging from furloughs to reduced pay to closed services. Rural and non-urban health systems, struggling even before the pandemic, are facing catastrophic financial challenges. Yesterday one national rural health provider with 24 hospitals declared bankruptcy, and today, it was reported that 25% of America’s rural hospitals are at risk of closing.
The good news is that, due to the unique nature and structure of Ballad Health, and due to our past financial stewardship, Ballad Health has been able to avoid such extreme financial challenges and has been in a better position to navigate this challenge – keeping all our rural hospitals open and sustaining our tertiary access points.
However, the ongoing pandemic-related volume decline is too significant to ignore without having lasting damage if we do not take responsible steps now.
While other systems moved last week to implement personnel reductions or reductions in pay, we wanted to take some time to understand the Stimulus bill (CARES Act) provided by Congress and how we can optimize relief for our system and team members. As a result of the CARES Act, there is some financial relief that can help us build a bridge back to full operations at such time as that can occur. While we work to build this bridge, we also must plan for an eventual surge in volume related to COVID-19.
While Ballad Health is considered “essential” for purposes of stay-at-home orders issued by the governors of Tennessee and Virginia, it is important for team member and community safety that only team members critical to the immediate COVID-19 response and caring for patients with urgent/emergent needs be called into the work setting. Therefore, many have already been working reduced hours, or even not at all. We feel there are steps we can take now which can provide relief.
The steps we are announcing have three critical goals:
1) Meeting critical staffing needs for bedside nursing, respiratory therapy, and nursing assistants and licensed practical nurses who support bedside nursing and direct patient care during the current decline, and in the event of a surge in volume related to COVID-19;
2) Providing relief for certain team members experiencing reduced working hours due to the severe decline in patient volumes: The federal stimulus package is intended to provide relief to these individuals by providing access to temporary benefits paid for, in part, by Ballad Health, and in part, by the federal government; and
3) Reducing the fixed administrative cost of sustaining the operations of Ballad Health to mitigate losses associated with the severe decline in volumes. Currently, Ballad Health is projecting losses in cash flow in the next 90 days to be in excess of $150 million.
To meet critical staffing needs, Ballad Health will provide guaranteed work hours for each pay period for certain direct patient care roles, including bedside nursing, respiratory therapy, and nursing assistants and licensed practical nurses who support bedside nursing, until further notice. This guarantee will ensure, despite the reduced volumes we are experiencing, we can keep our bedside team in place in the event we face a surge of COVID-19 cases. During guaranteed work hours, if the team members are not needed for direct patient care due to low volumes, they may be asked to perform other functions that are within their scope of practice and/or which they are qualified to perform, or they may simply be called off without a reduction in pay.
Temporarily, direct care bedside nurses typically working 1.05 FTE, will be guaranteed full employed status of .9FTE. While overtime will not be required, it is certainly encouraged if there is a need. Respiratory therapists, nursing assistants and licensed practical nurses who support inpatient nursing units and the emergency department for direct patient care during the current period will be guaranteed their full employed status. For example, if the team member is in the system as .9 FTE, they will be guaranteed .9 FTE. If they are in the system as .6 FTE, they will be guaranteed .6 FTE. These guaranteed hours are intended to ensure stability in available staffing, and to ensure these critical professionals are available in the event of a surge in volumes related to COVID-19. During this time, we are also limiting travel of this critical workforce to ensure we do not lose them to illness or a mandatory quarantine upon their return.
To provide relief for certain other team members experiencing reductions in work hours due to the severe decline in patient volumes, Ballad Health is taking steps to ensure these team members can access the benefits provided by the federal CARES Act intended to provide relief to displaced workers and to companies facing severe disruption in business. These benefits will be funded in part by the federal government and in part by Ballad Health.
A temporary furlough of certain team members will allow access to this benefit. For the majority of these team members who have already had hours reduced or eliminated, it is likely this step will replace most or all of their pay.
During the furlough period, Ballad Health will continue to provide health insurance and pharmacy coverage, as well as other benefits. Ballad Health will waive the team member premium contribution for these benefits during the furlough period. Team members who have paid time off accrued, will be permitted to do a one-time cash-out up to 80 hours prior to Ballad Health processing the claim for the unemployment benefit. Additionally, when furloughed team members are called back to work, there will be no break in service time related to seniority or resumption of benefit accruals. Additional information can be found in the Team Member Mandatory Administrative Furlough Policy.
To reduce fixed administrative costs during this period of severe volume decline, team members in certain support departments, administrative functions and non-critical service locations will also be placed on temporary furlough. These team members will have access to the same unemployment benefits as furloughed team members in volume-dependent positions. Team members affected by this action will be permitted to choose among various options related to access to paid time off accrued for this period of time.
Under the new federal stimulus package, the 10% penalty for early withdrawal of assets from a retirement plan may be waived if due to difficulties associated with COVID-19. Eligibility for this provision extends to those who face financial stress or reduced income due to COVID-19. Up to $100,000 may be withdrawn without the 10 % penalty, although regular tax withholdings will apply. Human Resources will provide information to team members so they may take advantage of this provision if they choose.
Any team member furloughed may be recalled based on the needs of the organization, and these furloughs will be constantly evaluated to ensure we can meet the needs of our patients and our region.
Team members affected by these three steps will be notified directly by their supervisor who will provide more details on how this process will work.
Additional steps
We are taking additional steps to reduce the impact to our team members and to ensure the responsible stewardship of the organization during a period of time where as much as 70% of our volumes have been eliminated:
- As I shared previously, I will not ask our team members to do something I am not also willing to do. Therefore, I am foregoing 100% of my pay during a 60-day period and am not seeking or accepting any alternative benefit to replace my compensation.
- Anyone in a senior vice president role or higher will receive a 20% reduction in pay during this 60-day period.
- Anyone in an assistant vice president role or vice president role will receive a 10% reduction in pay during this 60-day period.
- Under the direction of the physician-led board of Ballad Health Medical Associates, the medical group will take immediate action to reduce certain physician and advanced practice provider compensation by 20% during this period where volumes are reduced. Frontline staff working in our physician practices or urgent cares who are not furloughed will not see any reduction to their compensation for the hours they work.
- Overtime in non-clinical departments will not be approved unless specifically authorized by the executive vice president responsible for the department.
- All spending on COPA-related plans is suspended pursuant to suspension of certain Terms of Certification of the COPA imposed by the Attorney General and Commissioner of Health.
- All capital spending is suspended unless specifically authorized by me. We will continue our system-wide transition to Epic and certain critical projects which are near completion.
- Spending on outside consultants or professional agreements is suspended unless specifically approved by the Ballad Health chief financial officer. “Consultants” is not intended to apply to physicians consulting on patient care issues.
- Due to reduced volumes, all supply inventory par levels are being evaluated and reduced under the oversight of our supply chain leadership.
- Ballad Health will suspend retirement contributions for FY20.
- All paid time off accruals for the remainder of the FY20 will be foregone for managers and above. Except for those noted above who are affected by the furlough, paid time off cash-outs will not be approved. For those affected by the furlough, the paid time off cash-out policy will allow a one-time cash-out of up to 80 hours prior to filing for unemployment benefits.
Other operational steps may be taken on a market-by-market basis to consolidate certain services. Such steps will require the approval of the market chief executive officer and the Ballad Health chief operating officer.
There will undoubtedly be questions and unintended issues resulting from these decisions, and we pledge to work through those with you. Some of these decisions will actually cost more money, while others are designed to reduce our costs. Each of these decisions serves a purpose. As leaders of this important enterprise, we are also human, and despite our best efforts, we are certainly capable of making mistakes or miscalculations. Our commitment is to be prepared to make adjustments as necessary in order to achieve our primary focus: Honoring those we serve by providing the best possible care and doing so by protecting our team members and being responsible stewards of our healthcare resources.
I pray for our colleagues here and around the country who are affected by this pandemic – whether clinically or economically. I am also grateful for the lifeline that Congress provided through the CARES Act, and the positive impact it will have on our team members, the local economy and our organization.
Thank you for all you do, and God Bless you.
Alan
