Altru president says cuts come outside of direct patient-care departments
After hospital lays off 7% of its workforce, Dr. Steven Weiser, president of Altru, says "navigating these financial challenges are difficult."
Altru Health System, the Grand Forks-based medical care group that shed 167 jobs this week, continues to forge ahead in an economic landscape reshaped by the coronavirus pandemic.
It’s unclear how much more tumult is in store for the group, given the sudden shifts in revenue that have struck the entire health care industry — which, for Altru, arrived at a financial low ebb. But Dr. Steven Weiser, the group’s president, said in a Herald interview that recent cuts were targeted in positions outside direct patient care, including human resources, marketing and the like.
“There were none that were directed at patient-care roles, such as nurses or therapists, for that matter,” Weiser said, adding that about 80% of the job losses were in the Grand Forks area. “We’re going to come out of it and continue to do what we do day to day, which is take good care of our community and the region that we serve. You know, navigating these financial challenges are difficult, but at the end of the day, we have to do them purposefully with the one goal in mind, which is to serve our purpose of patient care.”
Related: Altru Health System lays off 167 workers
Weiser addressed the cuts and the future of the company in an interview with the Herald this week, which comes after other North Dakota health care groups have grappled with cuts of their own — made necessary as coronavirus forces hospitals to take expensive preparatory measures and as patients delay non-emergency procedures. Sanford Fargo reported a 40% drop in patient volume one month ago, and the Minot Daily News reported as early as April on furloughs and revenue losses at Trinity Health. At Altru, Weiser said, there’s also been a big revenue slowdown, and Altru had already announced cuts in executive pay and staffing hours.
“Health care is a business model with very thin margins,” Keith Lund, president and CEO of the local economic development corporation, said. “Any crisis such as (the coronavirus pandemic) is going to put a significant amount of stress on that business model.”
Related: As revenue decreases, hospitals in GF region worry about bottom line
Hospitals have been buoyed in part by federal funds that help prop up businesses during the coronavirus slowdown, but Weiser stressed that Altru is positioning itself not to expect any more than it’s already received — like the $10.6 million Weiser said Altru has gotten under the federal CARES Act, which he said amounted to a relative drop in the bucket for the hospital of just a few days’ cash on hand.
“It’s not anything long-term sustainable,” he said. “... (And) I don’t think the government is going to be able to print more money to bail anything out. Altru Health System will adapt to what our challenges are. We’ll take what other support we may get, but we don’t count on any further support.”
Altru’s financial position has shifted greatly during the last four years as it has weathered a 2016 structural failure at its Grand Forks clinic, leading to a nine-figure hospital project that drained cash reserves and has since been put on hold during the pandemic. Financial records for the company show that it had as much as 150 operating days’ worth of cash on hand at the end of the second quarter of 2016. That number fell precipitously in 2019, going as low as about 107 days at the end of the third quarter, and recovered to about 125.5 days by the end of March — right as the pandemic was hitting.
Weiser said that’s still roughly where the figure sits as of early June, though he’d certainly like it higher. He also pointed out that the hospital is beholden to the economy and patients’ financial means.
“(Patients) need to have the ability to come and get care and pay for their coverage, and those are all things that are at great risk,” he said. “And getting our economy back is probably a big step toward people focusing on their health care as well.”
The company’s financial records have also been deleted from Altru’s website, where internet archival records show they had been for at least nine years. A spokesperson said they were deleted from the site to remove a “redundancy” with a separate public financial reporting site, where the Herald obtained them.
Brad Gibbens, the deputy director of UND’s Center for Rural Health, holds out hope that there’s enough federal dollars to continue to meaningfully help hospitals around the country. He spoke to the Herald last month on the extraordinary economic changes facing the health care system, especially for North Dakota’s smallest hospitals.
"If you're already in a situation where you're bleeding money, and you lose all of your outpatient and elective surgeries … it just adds on top of all the problems you have,” he said of Altru. “That's why the federal dollars coming in are lifesavers. Hopefully, the dollars stretch far enough that when the dollars start to run out … they can get upright again."
And Gibbens points out that, despite the pain of the layoffs, he sees a company that saves lives trying to do its best with what it has.
"The average layperson doesn't understand health care finances. They just see it as the big, bad evil Altru taking livelihood from people,” he said. “And certainly that's not what Altru is trying to do. It's trying to survive.”