Wellstar furloughs 1,070 workers; other systems too face tough losses

A man walks past Wellstar Atlanta Medical Center in Atlanta on Wednesday. The Wellstar system has announced it is furloughing more than 1,000 employees across its network. (JOHN SPINK/JSPINK@AJC.COM)
A man walks past Wellstar Atlanta Medical Center in Atlanta on Wednesday. The Wellstar system has announced it is furloughing more than 1,000 employees across its network. (JOHN SPINK/JSPINK@AJC.COM)

As the coronavirus wreaks havoc on medical care networks and the larger economy, Wellstar Health System has furloughed 1,070 employees.

The furloughs are part of dramatic cost-cutting moves made by the Marietta-based system this week as it tries to offset financial deficits likely to run into the hundreds of millions of dollars.

"The financial reality is that, despite treating COVID-19 patients, our patient volumes overall have been drastically reduced since mid-March," Candice Saunders, president and chief executive officer, said in a written statement.

Wellstar has received an estimated $140 million in federal relief funds from the CARES Act. Of that, about $53 million is earmarked for Wellstar Kennestone, $20 million for Wellstar’s Atlanta Medical Center, $10 million at Wellstar Cobb Hospital in Austell, $3.9 million for Wellstar North Fulton in Alpharetta and $2.8 million at Wellstar Spalding Regional.

But that money is not enough to erase the deficit, Saunders said.

Wellstar, one of the largest health care systems in the state, also has instituted a hiring freeze, eliminated overtime and bonus pay and adjusted senior executive and physician pay, according to the statement.

The furloughs are to be in effect through July 31, and most workers are eligible for unemployment benefits. Those furloughed employees will retain their health care benefits, according to Wellstar.

Wellstar Health System, which employs 24,300 people, is also reducing work hours for an additional 1,861 workers.

Despite the national focus on health care workers who are treating victims of COVID-19, the pandemic has led to a dramatic plunge in elective surgeries and many other kinds of non-emergency medical visits and treatments.

Even many hospital emergency rooms are not as busy as usual.The nation's health care systems as a whole are losing $50 billion a month, according to the American Hospital Association.

The result has been furloughs and a wave of layoffs. In the past eight weeks the Georgia Department of Labor has processed initial jobless claims from 221,519 workers in health care.

Emory Healthcare, which has about 25,000 employees, has not announced furloughs or layoffs. But it is confronting many of the same pandemic-triggered issues, said spokesman Vincent Dollard.

"We are assessing how best to move forward for the remainder of 2020 and into 2021," he said.

Piedmont Healthcare, which has about 23,000 employees, also is trying to cut costs, according to a statement from a spokesman.

"We are adjusting our operations by reducing operating expenses and flexing staff to match patient volumes," he said. "We … feel fortunate that these efforts enabled us to avoid any large-scale furloughs or layoffs at this time."