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The CEO of Intermountain Healthcare has confirmed that about 600 employees are vulnerable to pay cuts — and executives of the company will not receive their typical annual raises — as demands for medical care shift during the coronavirus pandemic.
The company is releasing that new detail about the scope of the possible reductions after they were reported early this week.
Both a video message sent to Intermountain staff late last week from another hospital administrator and a list of frequently asked questions that employees received — which The Salt Lake Tribune reviewed — said the reductions “will” happen.
The CEO said in an interview Wednesday that if demand revives for medical care unrelated to the outbreak, however, it’s possible the cuts will be smaller or there will be none at all. Yet two more medical providers in Utah now say they will also cut back hours and salaries for their staff.
Steward Health Care, which owns five hospitals and 12 clinics in the state, and ARUP Laboratories, which is conducting testing during the outbreak, are furloughing some employees, offering voluntary leave and reducing paychecks.
“Nobody is immune to this,” said Darren Grubb, a spokesperson for Steward. “It’s impacting health care companies across the country.”
The cuts come despite the growing need for medical professionals to respond to the pandemic and as positive cases of COVID-19 in Utah increased to 1,074 Thursday. But other types of care are seeing far fewer patients because all elective and nonessential surgeries are being postponed during the outbreak, as well as due to other canceled appointments.
So companies are not receiving as much revenue. Intermountain CEO Marc Harrison said: “I guarantee you that we’re losing money. We don’t know how much yet. We’re trying to figure that out.”
To stem some of the loss, Intermountain — the largest medical provider in the state — plans to cut pay in June for some physicians, nurse practitioners and physician assistants who see a reduction in their workloads. Intermountain will ensure that all those affected will still be making at least 85% of their current income.
“But I’m not minimizing the potential impact of a 15% pay cut,” Harrison added.
For a doctor making $200,000, which is the median physician’s salary nationwide according to U.S. News, the current proposed cut would be $30,000 a year.
Intermountain has faced some criticism for its plan. And Harrison responded by noting that all executive leaders will forgo their raises this year. As for whether those top-paid individuals will face cuts, too, he added, “We’re leaving all options open.”
But nothing has been determined yet.
Harrison, according to public tax documents, made $1.6 million in 2017, with roughly an additional $1.4 million in benefits and perks. In 2018, the CEO’s bonus was $200,000.
The company employs 41,000 people total.
When The Tribune first reported the planned cuts, four advanced practice providers expressed their concerns. Their identities and employment were verified, but The Tribune agreed not to name them due to their fear of retaliation. Each confirmed the pay cuts and provided internal documents from administrators explaining the changes.
In the following days, at least a dozen more staff have also reached out to talk about their frustration over the reductions. The Tribune also verified their employment.
A physician at Intermountain said Thursday that when the cuts were first announced to employees last week, there was no specificity — such as Intermountain’s pledge that no one will receive less than 85 percent of their current salary. While Harrison in his Wednesday interview identified 600 employees potentially subject to pay reductions, many more employees received an email telling them they could face cuts, said staff who spoke to The Tribune. For example, one ICU nurse said he received the notice — but Harrison says such frontline workers will not be impacted.
“They absolutely did not tell us that 85% thing. That’s totally them trying to pretend like they were fixing things,” the physician said.
Harrison also said that the company held 120 meetings to get input from those who would be affected by the cuts. And he said most people were on board and see it as a way to “soften the blow.”
“Is every single person happy? Probably not,” he acknowledged. But “these folks know if we wanted to play hardball — and that wasn’t in the picture at all,” that the company could have.
Intermountain promises to pay up to four weeks for work hours that employees lose; staff can also use their accumulated paid time off, or PTO, to cover other missed work after that.
But the physician who spoke to The Tribune said the company “did not ask" her opinion, nor did it ask anyone she knows. And she’s worried how the reductions will impact her ability to pay off her student loans “that are pretty huge.”
Daron Cowley, Intermountain spokesman, responded: “It wasn’t practical to reach out and get input from all 600 physicians. It just wasn’t possible.” But the company, he said, spoke to 60 physicians from different specialities.
Caregivers who are on an RVU — or relative value units — schedule, paid based on productivity and the number of patients seen, do not get PTO because of how their practices are set up, the doctor noted. So if their income is reduced, that will not be an option for them. “It’s really disingenuous of them to use that as a defense,” she said.
Cowley said those under contract still get 25 days of “all-purpose leave” each year. And, overall, the cuts should not impact physicians who are on salary, he added.
Another advanced practice provider interviewed by The Tribune said: “We know what we heard — and we all heard pay cuts, not selective pay adjustments for those who are seeing a reduction.”
Additionally, the provider noted, regardless of whether staff are in an ICU or emergency room, they’re still seeing patients and risking infection from the virus. As much as possible, staff have moved to video or telephone calls. But that’s not always possible, and the work hasn’t stopped.
Harrison noted in response that he believes Intermountain is handling the issue in the best way possible. Some physicians, based on their RVU contracts, he said, could lose up to 25% of their pay without the company stepping in and limiting it to 15%.
And Intermountain is striving to redeploy employees to other more needed areas during the virus outbreak so they can possibly continue to make their full pay, he said.
“I’m working so hard to keep people in a place where they can pay their rent and buy food,” Harrison said. “It’s a balance I need to thread.”
Other Utah companies making cuts
In Utah, Steward Health Care is also furloughing some employees and cutting physician pay.
The furloughs — which are temporary — will mostly impact staff who are non-clinical and do not work with patients, said Grubb, the company’s spokesperson. He declined to provide specific numbers. But no doctors will be placed on leave, he said.
Additionally, similar to Intermountain, some physicians and nurse practitioners will see pay cuts.
The Tribune spoke to two Steward employees in Utah. One advanced practice provider said his salary is being cut by 10% “until things improve.” The Tribune verified his employment and agreed to not publish his name due to his fear of being fired for speaking out.
In addition to clinics losing patients, the ICUs at the five Steward hospitals in Utah are not full and have seen few patients with the virus, he said. “Our hospital is basically empty right now,” he added, noting that they’ve had about four or five COVID-19 cases.
Another Steward physician confirmed the cuts. Unlike at Intermountain, though, she said, the salary reductions are happening across the board and include decreases for administrators.
Grubb did not comment on that and said the company hopes to maintain flexibility amid the unprecedented circumstances. It has hospitals in nine states.
“We don’t know the extent of what this is going to look like in Utah,” he said. “We believe these necessary measures will help us navigate this crisis while keeping our focus on the future — and our ongoing commitment to caring for patients and the communities we serve."
ARUP Laboratories is also having employees take voluntary unpaid leave. Despite high demand for coronavirus tests, demand for other diagnostics is down as hospitals and clinics limit procedures in order to conserve equipment. That has led to a drop in revenue.
“The whole lab industry is going to take a hit,” said Brian Jackson, spokesman for the Salt Lake City lab, on Wednesday.
Employees have been offered unpaid leave with benefits — an option that about 100 have taken.
Meanwhile, executive pay has also been cut. The lab’s CEO and president will each take a 25% cut, with a 10% reduction for other executives. All leadership will forgo their planned third-quarter bonuses.
At University of Utah Health Care — the next biggest provider in the state after Intermountain — no changes have been made yet, said spokeswoman Kathy Wilets.
She said the system does not plan any pay cuts. And it may actually end up paying employees more who are working with COVID-19 patients. They are currently in talks to set up hazard pay, which Intermountain does not provide.
“We’re not ruling out the possibility of the financial extra pay for people on the front lines,” Wilets said. “We are looking at all sorts of different ways to support staff.”