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St. Charles implements yearlong plan to recover from financial impacts of COVID-19

BEND, Ore. – Facing mounting financial challenges related to the COVID-19 pandemic, St. Charles Health System is taking a number of steps to move back to normal operations and regain its financial footing.

“We need to take action to improve our financial stability, but we are absolutely committed to doing that in ways that have the least impact on our caregivers,” said President and CEO Joe Sluka. “COVID-19 has changed our lives in ways we couldn’t have imagined just a few months ago, but by working together we will get through this and come out stronger on the other side.”

Starting June 1 and through the end of the year, St. Charles’ Executive Care Team is going to lead the health system’s recovery with a 10 percent pay cut.

Additionally, the health system will:

  • Give caregivers who qualify the opportunity to participate in one or more of three voluntary programs including a temporary reduction in hours, unpaid time off or a summer sabbatical
  • Require caregivers in nonpatient-facing areas to use earned time off or unpaid time off during extended closures around the Fourth of July, Thanksgiving and Christmas holidays
  • By mid-June, return to its normal way of flexing staffing based on patient volumes, which means caregivers who are “called off” will no longer be paid for missed shifts

Between March and early May, the health system lost $39 million in patient revenue as the result of cancelled elective surgeries and a steep decline in patient visits. At the same time, its spending increased by about $6.5 million to plan and prepare for COVID-19, including purchasing extra hospital beds, additional personal protective gear, screening tents and supplies, ventilators and new technology for virtual visits.

St. Charles also paid for 52,000 hours in missed shifts at a cost of more than $2.1 million and—with the help of the community—created a Hero Fund to award bonuses to frontline caregivers.

“It was important for us to support our caregivers in every way possible during this incredibly stressful time,” Sluka said. “Protecting their overall well-being was—and continues to be—one of our main goals throughout our recovery.”

Since early May, St. Charles has been able to slowly and safely expand its surgical and procedural volumes with guidance from Gov. Kate Brown and within the guidelines provided by the Oregon Health Authority.

“This is great news for our patients who have been waiting for these needed services,” said Chief Financial Officer Jenn Welander. “But while our volumes are starting to come back, we are not yet allowed to operate at our full capacity and getting back on solid financial footing will take some time.”

The health system has set a goal to “break even” for two months by the end of 2020. But even if St. Charles is able to hit that benchmark, current projections show the organization may still lose more than $50 million this year, as the financial impacts from the COVID-19 pandemic remain extremely uncertain.

“We simply are not generating enough money we need to care for patients, invest in our caregivers and support our community,” she said. “Instead, we are spending down our reserves and that isn’t sustainable. This recovery is complicated—it was complicated to prepare for a surge, it’s going to be complicated to manage COVID and it’s going to be very complicated for us to navigate this financial situation.”

About St. Charles Health System
St. Charles Health System, Inc., headquartered in Bend, Ore., owns and operates St. Charles Bend, Madras, Prineville and Redmond. It also owns family care clinics in Bend, Madras, Prineville, Redmond and Sisters. St. Charles is a private, not-for-profit Oregon corporation and is the largest employer in Central Oregon with more than 4,200 caregivers. In addition, there are more than 350 active medical staff members and nearly 200 visiting medical staff members who partner with the health system to provide a wide range of care and service to our communities.

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