BJC to furlough employees, cut salaries and more across organization due to coronavirus
The financial strain of COVID-19 is causing BJC HealthCare to cut expenses, including furloughing employees across its system, the health care provider announced Monday.
BJC said that over the next two weeks, it will furlough an undisclosed number of employees, suspend 401k and 403b matching funds for the remainder of 2020, delay annual salary increases for employees, cut salaries of senior executives and other leaders and reduce work hours for some employees in an effort to offset the loss of money from the coronavirus pandemic.
“Impacting our employees is something we do as a last resort,” Rich Liekweg, BJC HealthCare President and CEO, said in the announcement. “We took other actions immediately to reduce our expenses, including freezing hiring for all non-patient facing positions, stopping all business travel and suspending almost all construction projects. Unfortunately, these actions were not enough to bring our spending in line with payments for the care we continue to provide.”
BJC HealthCare employs a total of 31,000 employees in Southern Illinois and mid- and eastern-Missouri, including Memorial Hospital East in Shiloh, Memorial Hospital Belleville and Alton Memorial Hospital.
According to the statement, the cancellation of elective surgeries and procedures, purchase of millions of pieces of personal protective equipment, extra staffing and the establishment of remote testing sites put extra pressure on the system’s finances.
The statement did not specify which employees will be furloughed but said all members of the executive leadership team, including Liekweg, will have salary cuts ranging from 5% to 25%.
Employees who are furloughed will have the full cost of their medical and dental premiums covered during their furlough periods, which are expected to last eight weeks at a minimum. Those furloughed, BJC Chief People Officer Jackie Tischler said in the statement, will be able to apply for unemployment benefits.
“We will work with our team members to help answer their questions and provide resources to help them through this process, and as our patient volumes return, we look forward to welcoming them back to BJC,” Tischler said.
Furloughs announced by other companies
Last week, Springfield-based Hospital Sisters Health System, which operates St. Elizabeth’s Hospital in O’Fallon and the two St. Joseph’s Hospitals in Breese and Highland, announced it would furlough employees as well but did not disclose how many employees would be affected.
Before the BJC HealthCare and HSHS made their announcements, St. Louis-based SSM Health announced on April 27 that it would furlough 2,000 employees because of the decrease in patients due to the pandemic.
The number of SSM furloughs in the metro-east was not released. SSM Health operates doctors and physical therapy offices in southwestern Illinois. It also has Cardinal Glennon Children’s Hospital in St. Louis and St. Louis University Hospital.
Illinois hospitals are losing $1.4 billion a month in revenue because of COVID-19 costs, including canceled elective surgeries and procedures as well as fewer people going to the emergency room because of virus fears, according to Danny Chun, spokesman for the Illinois Hospital Association.
Statewide, hospitals usually have revenue of $3.2 billion a month, he said.
Liekweg said he believes BJC will “weather the storm.”
“While this is news we never wanted to have to share, we are confident that we will weather this storm together,” he said in a statement. “Our focus will be on ensuring our organization is able to continue providing high-quality care consistent with our mission for generations to come.”
This story was originally published May 4, 2020 at 12:10 PM.