SEATTLE — Furloughs due to the pandemic have been announced by UW Medicine, which has been at the forefront of local and global COVID-19 efforts including the creation of widely used outbreak models and processing most of Washington state’s diagnostic tests.
CEO Dr. Paul Ramsey last week announced an unprecedented $500 million budget shortfall. On Monday, UW Medicine officials announced one- to eight-week furloughs for 1,500 professional staff, which includes management and administrative workers, The Seattle Times reported.
Management and unions will bargain over furloughs for unionized staffers and could have an agreement by later this week, according to Dr. Lisa Brandenburg, president of UW Medicine Hospitals and Clinics.
Additional proposed cost-saving measures include reduced pay for senior leadership, pausing some capital projects, a hiring freeze for jobs not associated with patient care, and a halt to discretionary spending.
The system pays about $90 million a month in wages. The furloughs are expected to save $15 million between now and August.
“What we are doing right now is taking these temporary measures to preserve as many jobs as possible,” Brandenburg said.
UW Medicine has cemented itself as a key resource in connection with SARS-CoV-2, the virus that causes COVID-19. The medical school’s Institute for Health Metrics and Evaluation has about 90 people working on virus modeling for all 50 states and for some European nations, with plans to create models for every county in the United States.
“Continuing our response to COVID-19 is a perfect fit with our mission to improve health,” Ramsey said. The moves being made now are “intended to stabilize our financial foundation” so that work can continue, he said.
At the core of UW Medicine’s financial trouble is a loss of revenue from elective surgeries, which were paused at the height of the surge of COVID-19 patients into hospitals. Revenue shortfalls account for about $327 million of the estimated losses since March, according to a report given last week to the UW Board of Regents.
The system had been doing well financially heading into March, with UW Medical Center about $10 million ahead of budget forecasts.
UW Medicine will try to have some of its losses covered by federal and state programs, including FEMA, the government’s $2.2 trillion coronavirus rescue package and the Medicare advance payment program, Ramsey wrote in an email obtained by The Seattle Times. It will also pursue philanthropic donations through its Emergency Response Fund, he wrote.
Whatever UW Medicine does get from the state or Congress won’t be enough to cover its losses. The most important factor will be getting elective procedures and clinical patients back, Ramsey said.
Elective work is set to slowly begin this week. UW Medicine expects to be doing about 10% of its normal amount of elective work by the end of the month and could be fully operating by September, the system’s CFO told the Board of Regents.