Kaleida, losing big money, seeks furloughs

With losses of up to $30 million a month due to COVID-19, hospital giant seeks to stem hemorrhaging by reducing payroll

Kaleida Health, the region’s largest health-care system, is asking hundreds of employees to take voluntary, month-long furloughs beginning April 26. Exempt are doctors, nurses and other employees who are treating patients infected with COVID-19.

Kaleida, like other hospital and health-care providers, has been hammered by the material costs of fighting the COVID-19 epidemic. And it has been deprived of its most lucrative revenue streams while doing so.

Three weeks ago, Kaleida spokesman Michael Hughes told Investigative Post that the impact of the coronavirus on the system’s finances was “going to be ugly.”

In a press release announcing the furlough program, Hughes attached some numbers to his earlier prediction.

Kaleida has spent $15 million since the outbreak of the virus on protective gear for its staff, equipment and supplies, and extra staffing to prepare for the anticipated influx of COVID-19 patients, the statement said.

Meanwhile, Kaleida has been without its most lucrative revenue streams — elective surgeries, outpatient procedures, and emergency room visits, among them — since the middle of March.

Taking together extra expenses and lost revenues, Kaleida figures its operating losses might amount to as much as $30 million per month.

“Like other healthcare organizations across Western New York, New York State and the entire country, the pandemic has significantly impacted our bottom line,” Jody Lomeo, Kaleida’s president and CEO, said in a statement.

Our Weekly Newsletter

Last week, Kaleida imposed pay cuts for more than 300 administrators and managers. Now the system, which runs five hospitals in Western New York, is looking to the rest of its workforce to help it staunch the bleeding.

The 30-day furlough program is voluntary and was negotiated with 1199SEIU and CWA1168, the two unions representing more than 8,000 Kaleida workers. Doctors, nurses and other employees on the front line of the fight against COVID-19 in the region are not being asked to take furloughs. Nor are workers at long-term care facilities Kaleida operates.

Left unsaid is how many employees Kaleida wants to take a furlough and what happens if fewer opt to take one.

This week, the Cuomo administration announced hospitals in some, less affected parts of the state would be permitted to resume performing elective surgeries. Hospitals in Erie County, which has been hard hit by coronavirus, are not included.

In March, Dr. Nancy Nielsen, senior associate dean for health policy at UB’s Jacobs School of Medicine and Biomedical Sciences, characterized the COVID-19 crisis as “a body blow” to the finances of health-care providers, big and small, from single-doctor practices to regional giants like Kaleida.

On Wednesday, Nielsen told Investigative Post: “Hospitals are hurting, that’s for sure. And voluntary sounds better than mandatory, and furlough sounds better than layoff.”