UVA Health, facing $85M monthly deficit due to COVID-19 lockdown, making dramatic adjustments

The COVID-19 lockdown is impacting UVA Health, with a deficit running at $85 million a month forcing unprecedented changes in operations, including furloughs for some employees, and reductions in hours and pay cuts for others.

“These decisions were reached only after a great deal of input from leaders across the organization, and are focused on actions we must take now to be able to fulfill our mission,” said Dr. Craig Kent, Executive Vice President for Health Affairs for the University of Virginia, who is taking a 40 percent pay cut through the end of July.

Leaders at UVA Medical Center, UVA Physicians Group, the UVA School of Medicine and the UVA School of Nursing will reduce their compensation by 20 percent through the end of July.

Physicians in the health system are also taking a hit in the form of a 20 percent reduction in their total compensation through the end of July.

This is the result of lockdown measures over the past six weeks that have left hundreds of inpatient beds in the health system regularly unoccupied, surgeries declined by 70 percent, and clinic visits have been reduced by 90 percent.

“The challenges presented by this crisis are difficult to exaggerate,” Kent said. “We have no choice but to take action – now – to stabilize our organization.”

Without the significant changes being put in place, within a few months the health system would not have the necessary funding to carry out its mission of providing high-quality patient care, training health providers and supporting critical research.

In addition to the measures described above, UVA Health leaders are being asked to find savings where possible in medical supplies and pharmacy spending, along with reducing overtime, limiting work with contract staff, and adjusting facility lease commitments. Non-essential travel is being eliminated, and leaders are being asked to reduce discretionary spending.

Retirement contributions are being suspended through the end of July for all UVA Medical Center and non-physician UVA Physicians Group employees.

Funding for the School of Medicine, School of Nursing and Health Sciences Library will be reduced by a yet-to-be determined amount this year. Each entity will individually make decisions about potential program changes, salary reductions or furloughs.

Hours for patient care providers at UVA Medical Center and UVA Physicians Group will be adjusted on a shift-by-shift basis based on patient volumes. As patient volumes increase, so too will staffing. Any patient care staff member whose hours are reduced will be able to use their available paid time off. These changes will not affect team members caring for COVID-19 patients.

Some non-patient care staff at UVA Medical Center and UVA Physicians Group will be furloughed for up to three months. Health, dental and life insurance benefits will be preserved. Any furloughed employee will be able to use their available paid time off.

A special team from the UVA School of Law will provide information and resources for unemployment benefits. Those furloughed may also access UVA’s Emergency Assistance Fund for employees.

Of the above, actions that affect staff were the last resort, and are being put in place with the hope of avoiding the widespread layoffs other hospital systems in the region and country have been forced to make.

“Our people make us who we are,” Kent said. “In my short time here, I have observed a vibrant organization supported by remarkable people. Without a doubt, today’s actions are difficult, and the impact on our community will continue to be immense as the result of this health crisis. We hope to return colleagues to work, and salaries to normal, hopefully as soon as possible.”

UVA Health leaders will monitor the situation and evaluate these changes on a daily basis, with the goal of returning to regular operations soon.

“We all care deeply for this organization and about our future,” Kent said. “We will endure – I know we will, working together.”

A dedicated site for employees has been set up with information and resources for employees at the UVA Human Resources website.

Story by Chris Graham