ThedaCare projects to lose $30M

Posted on Jun 5, 2020 :: Insight on Business, Web Exclusive
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Posted by of Insight Publications

ThedaCare will lose a projected $30 million in 2020 due to the financial impact of COVID-19.

With COVID-19 cases rising across the country, the Centers for Disease Control and Prevention (CDC) advised all health systems to temporarily suspend non-urgent elective surgeries and other services to devote all available resources to serve the community as the virus spread. While the Neenah-based health system began to reinstate services in early May, the cost of safely managing COVID-19 cases and the suspension of other services led to a 40 percent reduction in net revenue during the month of April.

Dr. Imran A. Andrabi, ThedaCare’s president and CEO, said the health system has put in place a financial stabilization plan that protects patient care and jobs.

“In this challenging time, ThedaCare, like other health care organizations across the country, must take necessary steps to safeguard our mission and secure our shared future for the health and well-being of the communities we serve,” he said in a statement. “While we believe that the temporary suspension of these services was the right thing to do at the time, it had a severe impact.”

Prior to knowing how long it would take to resume suspended services, ThedaCare was originally projecting a $150 million loss for the year, but later was able to reduce the loss to $70 million. The new plan announced this week by ThedaCare will lower that to $30 million, Andrabi said.

Under ThedaCare’s Community Commitment and Financial Stabilization plan, Andrabi will take a 50 percent pay cut and executive team members will take a 40 percent cut. Other leaders — senior vice presidents, vice presidents, directors, managers, supervisors, physicians and advanced practice clinicians — will see a 10 percent cut in their pay for the remainder of 2020.

Andrabi said the organization’s plan does not include mass layoffs and that base salaries for staff members who are not in leadership roles will not change. ThedaCare is not the only health care system hit hard financially by COVID-19. The American Hospital Association estimates $202 billion in losses for U.S. hospitals and health systems in the last four months.