Doctors and nurses are getting hit with pay cuts, layoffs, and furloughs even as they fight the coronavirus pandemic

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Hospitals are facing financial hardship amid the coronavirus pandemic.

• Doctors, nurses, and other healthcare workers haven't been immune to layoffs, furloughs, pay cuts, and hiring freezes plaguing other sectors due to the coronavirus pandemic.
• State officials are telling hospitals to stop performing non-essential medical procedures, which is hitting their bottom lines.
• Hospitals are supposed to get $100 billion from the federal government to make up their losses, but it's not clear how quickly they'll get the money.
• Visit Business Insider's homepage for more stories.

Healthcare workers on the front lines of the coronavirus pandemic are contending with overcrowded hospitals and supply shortages as they put their own lives in danger to care for patients. And this week, many of them learned their pay would suffer too.

The medical staffing company Alteon Health plans to slash pay for administrative workers by 20% and to cut hours and benefits for clinicians, including some directly involved in fighting the pandemic, according to an email to staff obtained by Business Insider.

Alteon, which is backed by private-equity firm Frazier Healthcare Partners, has contracts with hospitals to employ doctors and nurses. The company said in an email to staff that the pay cuts were in response to a 30% decline in emergency department and hospitalist programs. Not only is revenue dwindling, but bills are being paid more slowly because people in the health insurance industry are working remotely, the email said.

The email to employees from CEO Steve Holtzclaw said he didn't know how long the cuts would last. Executive pay will take a 25% hit, and cuts will appear in workers' April 23 paychecks. The company won't be matching retirement funding or awarding bonuses. ProPublica previously reported on the pay cuts at Alteon.

Fears that the coronavirus might spread widely and kill millions of people put a halt to the US economy, resulting in state-wide shutdowns and layoffs, and massive unemployment numbers.

The healthcare industry, integral in getting the virus under control, hasn't been spared. State officials are telling hospitals to cancel many routine medical procedures, which are lucrative to hospitals but are taking a backseat to emergency care and treating people with COVID-19, as the disease caused by the coronavirus is known. That's forced some hospitals to cut back financially.

Holtzclaw predicted in his email to Alteon staff that similar cuts would become far more widespread across other companies in the coming weeks. Signs of a broad slowdown in healthcare hiring are already beginning to emerge.

"Healthcare job postings are down," Julia Pollak, labor economist at ZipRecruiter, told Business Insider.

"It's usually recession proof," she added. "So that's surprising."

Healthcare workers among victims of economic turmoil

Other healthcare employers are targeting workers who aren't working directly with patients who have COVID-19. On Tuesday, Bon Secours Mercy Health told workers who aren't directly involved in helping with the coronavirus that they would be furloughed, or temporarily laid off without pay, starting Friday.

The health system, which has hospitals in several states, had to make the cuts because it projects it will lose $100 million a month, John Starcher, the president and CEO at Bons Secours, wrote in a letter to employees. The furloughs will be paired with hiring freezes for non-critical care.

"Our resources - people, supplies, and finances - must be dedicated specifically to responding to COVID-19," Starcher wrote in an email to employees.

The company set aside $60 million to help workers who will face serious financial hardship, and spokeswoman Carol Billingsley said the furlough is expected to last 30 to 90 days. Workers who had accrued PTO will have that paid out.

Still, hospitals are set to receive $100 billion as part of the coronavirus stimulus package that President Donald Trump signed into law on Friday. The money is supposed to help hospitals pay for expenses they incur as they test and treat patients who have COVID-19 and to help them recoup revenue they lose from foregoing other medical procedures.

It's not yet clear, however, exactly when the funding will be able to go out and whether it will be able to save jobs. Senate Minority Leader Chuck Schumer on Wednesday urged further action from Congress, calling for measures in a potential next bill that would increase pay for frontline healthcare workers by 25%.

Bons Secours isn't alone. Connecticut Children's Medical Center in Hartford partially furloughed 400 workers for 60 days, meaning that workers are taking on fewer hours. Doctors and nurses make up 14% of that total, according to Monica Buchanan, spokeswoman for the medical center.

"Similar to many businesses and organizations across the state responding to the COVID-19 crisis, Connecticut Children's is experiencing the financial pressure that comes with taking vital measures to keep our community safe, including limiting elective procedures and non-urgent appointments," Buchanan said. "The resulting drop in our volume has forced us to take a hard look at our resources to ensure that we can continue offering the highest level of care to patients and families during this unprecedented and critical time."

A growing number of hospitals are reporting similar cuts. Becker's Hospital Review has tracked announcements from health systems across the US. Unemployment claims from people who worked healthcare are ticking up as well.

"Some states have been releasing their initial claims data by industry sectors and one of the leading sectors that had actually seen a big pickup in claims was healthcare. And that was very surprising to us," Bank of America economist Joseph Song told Business Insider.

"We weren't expecting that," he said. "I think the reasoning behind that is a lot of small private practices and smaller hospitals are laying off floor staff because patients aren't coming in for elective surgeries."

Some financial reprieve is coming

The American Hospital Association, which represents 5,000 hospitals, sent a letter to federal health officials on Tuesday asking them to quickly distribute the coronavirus stimulus funding to hospitals.

"Hospitals are in a crisis situation and time is of the essence," the group said.

The AHA recommended that health agencies automatically pay hospitals at the rate of $25,000 per bed. AHA recommended some hospitals be designated as "hot spots," which could be defined as those located in parts of the US with high numbers of deaths or those with a sharp rise in diagnoses. Such "hot spots" should receive $30,000 per bed, the group said.

The association estimated that, with about 924,000 hospital beds in the US, not including "hot spots," the federal government would spend $23 billion of the $100 billion that Congress allocated. After that, hospitals could apply for any other funding they might need, AHA wrote.

Carmen Reinicke contributed reporting to this story.

This article was corrected on April 7 to clarify how pay and benefits cuts at Alteon will be implemented.

If you work at a hospital facing layoffs, pay cuts, or furloughs amid the coronavirus pandemic, and are willing to share your story, please email senior healthcare reporter Kimberly Leonard at kleonard@businessinsider.com.

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