Tower Health to furlough at least 1,000 workers as COVID-19 wreaks havoc at hospitals

Tower Health, citing the loss of as much as half its revenue, on Tuesday announced the furlough of at least 1,000 of the 14,000-plus employees in its seven-hospital system stretching from Philadelphia to Reading.

Because of the suspension of non-urgent and elective services, the closure of many outpatient facilities, and the postponement of internal projects, “sustained work is not available for some of our employees,” Therese Sucher, Tower’s chief operating officer, said in an internal email.

Sucher said that managers would inform the affected employees on Tuesday and Wednesday. During the furlough, employees will continue to receive benefits if they have them now and will be able to use their accrued paid time off to receive pay during their temporary leave, she said.

Asked whether any Tower doctors or executives were taking pay cuts, a spokesperson said: “As the impact of COVID-19 continues to evolve, we will evaluate appropriate cost-saving measures that could be implemented in the future.”

Unlike many other Philadelphia health systems, Tower has not provided an estimate of how much money it is losing because of postponed services and higher costs from the pandemic. The much larger University of Pennsylvania Health System, for example, said Monday that it is projecting a $450 million operating loss from mid-March through June — before accounting for government aid, including $101 million received this month though the federal government’s $2 trillion COVID-19 aid package.

Under that CARES Act program, grants are based on last year’s Medicare payments to hospitals, not on COVID-19 costs, and Tower received $23.6 million. “These funds, while helpful, do not come close to making up for the decline in revenue Tower Health has experienced in March and into April,” a spokesperson said Monday.

Trinity Health Mid-Atlantic, which owns Mercy Fitzgerald and Mercy Philadelphia Campuses of Mercy Catholic Medical Center, Nazareth Hospital, St. Mary Medical Center, and Saint Francis Healthcare, this month announced an undisclosed number of furloughs. Shore Memorial in Somers Point, N.J., asked non-clinical workers to take voluntary layoffs.

Einstein Healthcare Network’s chief executive, Barry Freedman, said last Wednesday that his four-hospital system was expecting to furlough an unspecified number of its employees because of a projected $70 million operating loss from March through June.

On the same day, Dixie James, Einstein’s chief operating officer, told employees that leaders were taking “significant” pay cuts, ranging from 10% to 20% for executives and department chairs. Some doctors were asked to take a 10% percent pay cut through June to avoid furloughs.

Details on Einstein furloughs were not yet available Tuesday.

Temple University Health System, which said last week that it was losing $40 million a month because of COVID-19, is among several dozen nonprofit health systems whose financial outlook was revised to negative by Standard & Poor’s.

"Health-care providers typically have many fixed costs, and it can be difficult to sufficiently flex down variable costs due to the need to maintain certain minimum staffing standards and prepare for COVID-19 patients,” the ratings agency said Tuesday.

Separate from its furloughs, Tower took the unusual step this week of posting information on its website about the number of COVID-19 patients it has at its hospitals, which include Brandywine in Coatesville, Chestnut Hill in Philadelphia, Jennersville Regional in West Grove, Phoenixville in Phoenixville, and Pottstown Memorial Medical Center in Pottstown, along with its flagship Reading Hospital in West Reading.

Tower Health has also completed the $50 million acquisition of St. Christopher’s Hospital for Children in North Philadelphia in a joint venture with Drexel University.

Such patient counts by hospital have been closely guarded by state and city officials, who are supposed to be tracking available beds at hospitals.

At noon Wednesday, Tower’s dashboard showed that the collection of hospitals had 165 COVID-19 inpatients, 26 of them in critical care and 28 of them on ventilators. The nonprofit said 113 patients with COVID-19 had died in its hospitals.