Why Hospitals Are Laying People Off : The Indicator from Planet Money Hospitals are ramping up and gathering supplies to deal with a deluge of coronavirus patients. At the same time, revenues are down. All of this means hospitals across the U.S. are laying off workers.
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Why Hospitals Are Laying People Off

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Why Hospitals Are Laying People Off

Why Hospitals Are Laying People Off

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This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith, and this Friday our indicator of the week is 450,000. That is the number of people in the U.S. who are reportedly infected with coronavirus. More than 16,000 people have died of the virus in the U.S. For many cities across the country, including here in New York, many people have said this might be peak week. That is the week when the number of coronavirus cases will peak. And hospitals across the country in places like New Orleans, Seattle and New York have been flooded with people suffering from coronavirus. Many hospitals are so desperate for space, they've been converting cafeterias and parking lots into makeshift emergency rooms. As this is happening, many hospitals are also finding themselves in terrible financial distress as elective surgeries like knee replacements and procedures like colonoscopies have all but vanished, and expenses have been soaring.

Patrick Cawley is the CEO of the Medical University of South Carolina Health System in Charleston. He's also a physician. He's been at the university hospital for 17 years. It has more than 10,000 employees, including around 1,200 doctors. And right now it is bleeding money. This week it laid off hundreds of care workers. Today on the show, we talk with Dr. Cawley about what it's like to run a hospital in the middle of a pandemic, what he's struggling with and how he's preparing for the future.


VANEK SMITH: You've been doing this job for a long time. I imagine you've seen a lot of things. How does this - how does coronavirus and the coronavirus pandemic compare to what you've seen over the course of your career?

PATRICK CAWLEY: Well, I've been a CEO seven years, and for about almost seven years prior to that, I was either an associate chief medical officer or a chief medical officer. And I have seen many different things come at us and many challenges. This is absolutely unprecedented in the speed in which it has completely changed not only the entire economy but what it has done to hospitals and health systems. I've never used the word unprecedented as much as I have in the last three weeks.

VANEK SMITH: What is it like from the inside? Like, what does this mean for you running a hospital?

CAWLEY: The hospital is relatively quiet. It's almost eerie except when you go up on the units where we still have - we're still open to see patients. But we don't have as many units open as we usually do simply because we don't have as many patients at the moment - paradoxically, at the moment. We have not yet seen a surge of patients here in Charleston, but our team has been meeting every single day, making decisions. It's been nothing short of a full-on sprint for almost four weeks now. It's amazing. I mean, the first thing is just this potential surge where patients need hospitalization and intensive care, ventilator use and personal protective equipment. I mean, you put all that together, that requires substantial preparation.

VANEK SMITH: And cost.

CAWLEY: You know, that's - I was going to say that's the second thing we're dealing with as we're buying more supplies to get ready. So we have been spending some more money there, but in the meantime, we haven't seen - the number of surgeries, the number of procedures, ambulatory visits and even the total number of hospitalizations has actually dipped down. You put all that together, we went from making several million dollars a month to losing almost 30 million...

VANEK SMITH: Oh, my gosh.

CAWLEY: ...In less than a month.

VANEK SMITH: So what did you do? Have you handled this?

CAWLEY: So we've done a lot of things, like cut back on non-COVID supplies. And we put together a - what we call a workforce realignment plan. Some people received a cut in pay. Some received reduced work hours. So we temporarily laid off almost 900 care team members.

VANEK SMITH: Oh, wow. I mean, 900 people is a lot. That's a lot of layoffs. I mean, what was it like to make that decision?

CAWLEY: I would say it was the hardest decision I've ever had to make in my entire career, and I've had some tough decisions I've had to make. But I would put this right up there as the hardest one because these are - it's a great team. I mean, I've really worked with this team a lot over the last 15 to 17 years. I know them well. I know many of them on the frontlines. I worked with them years ago. I got emails from a lot of people. I got a lot of supportive emails from people who said, you know, I understand what you've got to do, and sorry you had to do it. But I'm here, and I'll be ready to come back. And I got other people that weren't as nice about it. So it's a sad day. Today is the day in which we were not seeing those people at work. They were temporarily laid off yesterday at 5 o'clock, and they're not here today.

So it's hard, although I told the rest of the team that's here, let's deal with the surge in COVID patients when they come. We'll take great care of them. But we're also going to start to recover and recover as fast as we can because we want to see those care team members back as soon as possible.

VANEK SMITH: I feel like it seems at first blush like such a sad irony because, like, the idea that a hospital would be so busy - you'd have so, so, so many people potentially showing up in the emergency room but also be struggling financially. I mean, it seems like hospitals would be the last places that would be in financial difficulty right now.

CAWLEY: Yeah. I've had this the same conversation about a dozen times a day with people outside of hospitals and health systems. Most revenue for a hospital comes from surgeries or procedures, and those things in our facility have dropped 60 to 70% in three weeks.

VANEK SMITH: Wow. It sounds like you haven't seen, like, a big surge of patients yet. Are you expecting that you will?

CAWLEY: Oh, we are expecting a surge. We're expecting in the next - within the next two weeks to start seeing the number of patients actually rise and peaking at about four to six weeks. What New York has experienced is a fast onset, and hopefully, they'll have a fast offset. We're going to experience something that is going to be busy but hopefully doesn't overwhelm us. But it'll be busy for a longer period of time.

VANEK SMITH: Have you made any, like, physical preparations? I know here in New York, they have a lot of - like, a lot of the emergency rooms set up tents for extra space or took over doctor's offices.

CAWLEY: Yes, we have reworked some internal space to be able to take 150 additional patients. We also - we have a fitness center on our campus about a block from the hospital that we have outfitted to handle about another 250 patients if that needs to happen.

VANEK SMITH: Seems - it's like wartime preparations almost. I mean, this is just, like, not the kind of thing that seems like it would be in a hospital administrator's job description.

CAWLEY: No, not normal. But I would tell you we are on the coast of South Carolina, and in some ways, I feel better prepared than a lot of other facilities because, you know, we experience at least one bad storm in some way almost once a year. So we do a lot of preparation work. Our internal surge capacity was - believe it or not, was something we had already prepared and we're ready for. The field hospital is something new. Would I ever think that I have to set up a field hospital? No. No, that is definitely new.

VANEK SMITH: You mentioned that you're really hoping that when this passes, like, things will go back to normal, and you'll be able to hire back the employees that have been laid off or furloughed. What has to happen? Like, what are you kind of watching for going forward to see if that can happen or if that's not going to be able to happen for a while?

CAWLEY: Well, I think it's a combination of things. I think that I need to be somewhat assured that we're not going to see additional many surges of COVID patients. You know, it is highly doubtful that this is the only surge we're going to see, so - and that's probably going to go on for nine months.


CAWLEY: So I do think there's a big surge coming at us in the next three to four weeks, and there's probably going to be a bunch of smaller surges beyond that. So I'm OK with us getting busy. What I don't want to be is overwhelmed because I know the care won't be - it's going to be hard to deliver the same level of care. And so to me, it's a series of being able to take these surges as they come but not get overwhelmed. You know, the last thing is, you know, we're going to need financial help to probably get through this, and that's going to have to come from state and federal government to some degree. That's what it's going to take.

VANEK SMITH: Patrick Cawley is the CEO of the Medical University of South Carolina Health System in Charleston. This episode of THE INDICATOR was produced by Camille Petersen. THE INDICATOR's edited by Paddy Hirsch and is a production of NPR.

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