Children’s Mercy in Kansas City furloughs nearly 600 employees

The financial squeeze of the new coronavirus outbreak has led Children’s Mercy Hospital in Kansas City to furlough nearly 600 employees for up to two months.

The hospital says financial losses amount to nearly $1 million every day.

The furloughs started over the weekend.

“COVID-19 is having a crushing, negative impact on patient care access, our employees and our financial performance,” Paul Kempinski, MS, FACHE, president and chief executive officer of Children’s Mercy, said in a news release.  “In order to keep our community safe and to prepare to care for COVID-19 patients, last month we suspended elective procedures and limited outpatient clinic visits.”

As a result, the hospital’s surgeries and outpatient visits are down by more than 70 percent. Its urgent care and emergency departments are down by 67 percent and 57 percent, respectively, and hospital admissions are down 32 percent. Yet, the hospital has cared for only four cases of COVID-19 thus far.

Pediatric hospitals, including Children’s Mercy, were left out of the federal government’s first $30 billion stimulus payment to hospitals and health care providers. Those payments were based on each hospital’s Medicare billings. Since Medicare is for people 65 years and older, children’s hospitals were excluded, as they are reliant upon Medicaid for much of their funding. Kempinski said he hopes that may change with the bill passed earlier this week by Congress, but he noted that the specific amounts, timing and method of allocation are yet unclear.

More than 2,500 Children’s Mercy employees have been working from home. Another 350 employees are at home and not working or are working reduced hours. The hospital has temporarily redeployed about 150 employees into new roles, such as employee COVID-19 screenings, in an effort to keep as many employees working as possible.

“To address the growing financial shortfall caused by the pandemic, more steps are needed,” Kempinski said today. “More than half our cost to operate the hospital (60 percent) is in our people, our greatest and most valued resource. From the start of this crisis, it has been our intent to protect our employees, while fulfilling our mission and ensuring Children’s Mercy will be here for generations to come.

“After careful analysis, thoughtful deliberations and intense soul-searching, we have decided to take additional steps.” Those steps are:

• Announcing that senior leadership will forfeit a portion of their compensation for Fiscal Year 2020 ranging from 20% for vice presidents to 30% for the CEO. A portion of this will be redirected to the Emergency Response Fund for employees and patient families in need.
• Furloughing 575 employees for up to 60 days, beginning April 26.

Furloughed employees will continue to have full access to all of CM’s health and wellness offerings, including access to the Employee Wellness Center and pharmacy.

Children’s Mercy joins hundreds of hospitals nationwide that also have furloughed workers as a result of COVID-19, including Washington University School of Medicine (St. Louis), CoxHealth (Springfield), Lurie Children’s Hospital (Chicago), Tenet Health Care (Detroit) and Mayo Clinic (Rochester).