Dallas-based Baylor Scott & White Health will lay off around 1,200 workers across its health system as COVID-19 buffets its bottom line.
The layoffs, which account for about 3% of its approximately 46,500 workers, are part of a broader workforce restructuring to accommodate significant revenue losses largely due to deferred non-urgent procedures, Baylor Scott & White announced Tuesday. An unspecified number of employees will also be furloughed, senior executives will receive temporary pay cuts, physician compensation models will be tweaked and open positions will remain unfilled.
"We worked to reassure and safeguard our people through the uncertainty as we prepared for a potential surge of COVID-19 patients, yet experienced a drastic drop in visits, largely due to the suspension of non-urgent surgeries and procedures," BSW said in a statement, noting that it protected pay of all employees through June 7. "Now, as early data is revealing the significant economic implications of the pandemic on Texans and the operational and financial implications on our health system, we are implementing changes to remain prepared and able to adapt in continued unpredictability."
The integrated health system said that plans made prior to the pandemic to boost the hourly pay rate for 12,000 nurses and staff remain intact.
Through the first nine months of BSW's 2020 fiscal year ended March 31, the health system reported $539 million of operating income on operating revenue of $8.1 billion, down from operating income of $582 million on $7.4 billion of operating revenue compared to the same period in 2019, according to Modern Healthcare's financial database.
The health system had nearly $4.9 billion of unrestricted cash and investments and 187 unrestricted days cash on hand, down from $5.2 billion of unrestricted cash and investments and 216 unrestricted days cash on hand compared to the same period in 2019.
For the full year, BSW reported $725 million of operating income on $10.1 billion of operating revenue in 2019, up from operating income of $582 million on $9.5 billion of operating revenue in 2018.
While BSW didn't specify how much COVID-19 has dented revenue, many hospitals are reporting reductions of at least 50%.
Although, patient volumes at BSW clinics rebounded this week to 95% of pre-COVID levels, hospital admissions were around 92% and operating room cases were around 97%, the organization said.
"While patient volumes are steadily increasing, we remain in a financial recovery period during which we must plan for continued unpredictability," BSW said in a statement.
The restructuring mirrors cost-reduction strategies taking place at hospitals across the country as they cope with lower revenues and higher expenses.
Dallas-based Tenet Healthcare Corp. announced last month that it furloughed about 500 full-time positions and issued another $500 million in debt to boost liquidity.
