Furloughs, layoffs likely at Philly-area hospitals as virus leads to financial blow

Mark Abrams
June 18, 2020 - 1:13 pm

PHILADELPHIA (KYW Newsradio) — Philadelphia-area hospitals may soon be forced to furlough hundreds of staff and drastically cut services due to the financial blow from COVID-19.

“Hospitals across the country have been hammered by COVID-19,” said Michael Abrams, a Philadelphia native who is a managing partner of Numerof & Associates in St. Louis, Missouri. “In particular, the loss of revenue that is attributable to canceled and deferred services. And that’s all of a sudden missing.”

He said hospitals have suffered tens of millions of dollars in losses each month since the pandemic hit.

“The bottom line: This has put a real hole in the bottom of the financial boat for hospitals across the country,” Abrams said. “Philadelphia is no exception.”

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Einstein Healthcare Network announced furloughs in April. This week, Reading-based Tower Health cut 1,000 jobs, as it is closing maternity operations at Pottstown Hospital and two practices in Montgomery County.

Tower Health also owns St. Christopher’s Hospital for Children and several suburban hospitals.

Abrams said this may be a bellwether of things to come.

“There’s no question that individual hospitals could be at risk,” he said. “What matters most here is the kind of financial shape that each individual hospital and the system to which it belongs was in going into 2020.”

About one-third of hospitals in the Philadelphia region suffered losses in 2019, according to Abrams, which didn’t help their bottom lines when the coronavirus crisis exploded early this year.

Hospital administrators say they appreciate the federal aid they’re receiving, but it’s not enough.

Abrams said hospitals will be under severe pressure in the coming weeks to make cuts to stop the financial bleeding.