Kentucky hospital chain furloughs about 500 employees as coronavirus saps business
The largest hospital chain in Eastern Kentucky will lay off about 500 employees because of a sharp reduction in business associated with the novel coronavirus pandemic.
Appalachian Regional Healthcare confirmed the reductions in a news release Friday.
Hospitals expect a rise in patients in the coming weeks because more people are likely to contract coronavirus and develop the respiratory disease COVID-19, but for now, business is down at many.
Gov. Andy Beshear has ordered ARH and other hospitals to stop elective surgeries as result of the pandemic to cut down on the number of people in facilities and to preserve personal protective equipment for medical staffers.
The ARH system has seen a 30 percent decrease in its overall business as a result of a drop in the number of patients coming in and the closure of services, Sonya Bergman, vice president of human resources, said in the news release.
The decision to reduce staff in the short run was necessary to reassign resources to clinical areas most needed to deal with the anticipated surge in COVID-19 cases and to protect employees, Bergman said.
“As health care providers, we are on the front lines of the COVID-19 pandemic and need to do everything we can to ensure we have the right clinical resources in place, including staff, supplies and equipment, to prepare for a COVID-19 patient surge,” Bergman said.
She said ARH considers the staff reductions temporary and plans to recall employees when the normal volume of patients returns and it is safe to do so.
ARH is headquartered in Lexington and operates 13 hospitals in Eastern Kentucky and southern West Virginia, along with home-health agencies, pharmacies and other services.
“It’s very unfortunate, it’s just another economic fallout as a result of this pandemic,” said Harlan County Judge-Executive Dan Mosley. “This pandemic is having an impact on every industry, including the health care industry.”
Mosley said an Harlan County ARH official told him that employees will have the option to receive health insurance and benefits during the furlough.
The system says it is the largest provider of care and single largest employer in southeastern Kentucky.
“It’s difficult to see these kinds of layoffs in a region that’s already struggling because of the effects of the coal economy downturn,” said state Rep. Chris Harris, D-Forest Hills.
Experts have warned that many rural hospitals may struggle to shoulder the burden of limited visitations. Nearly half of all rural hospitals operate at a financial loss, according to the National Rural Health Association.
Other Kentucky hospitals have taken similar measures, including the hospital in Morehead, which laid off a quarter of its staff this week because of a downturn in revenue.
“When (rural hospitals) are already working on a shoestring budget anyway keeping these things operational, I understand why a decision like this had to be made now to keep them viable long term,” Mosley said. “We want a health care facility here in Harlan County for years to come — we don’t want the pandemic to put it out of business.”
Harris said he hopes businesses and furloughed employees will take advantage of the financial benefits that will come with the federal stimulus package, which includes a stimulus payment to most American adults and increased opportunities for unemployment insurance.
In Pike County, where ARH operates a hospital near the West Virginia border, Judge-Executive Ray Jones said he’s also concerned about the impact the layoffs could have on the county’s collection of occupational tax, which is already likely to see a dramatic decline as a result of other business closures.
The loss of that revenue could have particularly damaging effect in coal-producing counties, which have had to cut back on basic services as a result of dramatic drop in local tax revenue, Jones said.
“When people are asked to not go out of the house, health care providers are being asked to see patients on a limited basis, it’s gonna have a ripple effect,” Jones said. “One of our biggest employers in Pike County is Tug Valley ARH, and that’s one of our biggest sources of occupational tax revenue.”
This story was originally published March 27, 2020 at 3:24 PM.
