Dallas-based Steward Health Care and Tenet Healthcare will be furloughing employees in response to lost revenue during the COVID-19 crisis.
Tenet Healthcare Corporation has furloughed 500 corporate and nonpatient care employees, and is also cutting spending in a number of areas in response to the COVID-19 pandemic, as reported in the Dallas Business Journal.
While hospitals around the country are seeing more coronavirus patients, elective procedures have all but ended, resulting in significant losses of revenue for healthcare companies of all sizes.
The company is also looking to raise money by selling $500 million worth of senior notes that will mature in 2025 as it looks to bridge the gap until revenue streams can be kickstarted again. Senior notes are first to be repaid in the case of bankruptcy, and are more secure than the average bond.
Tenet is rethinking its entire financial projection for the rest of the year. “Due to the rapidly evolving environment and continued uncertainty, and the likelihood that this impact will materially affect Tenet’s financial performance, Tenet has withdrawn its previously announced first quarter and full year financial outlook for 2020,” a release reads.
Tenet is not alone in its struggles, as many practices that focused on elective procedures have seen their entire revenue stream dry up, while primary care practices have lost in person visits and the revenue that was generated from those visits. It is unclear how federal aid will impact providers large and small. They are also delaying benefits such as 401 (k) matching and are deferring $250 million worth of Social Security payroll tax payments, DBJ reports.
At Steward, the health system told employees to expect furloughs on nonclinical staff in nine states, according to Kaiser Health News.
“Elective surgeries are the cornerstone of our hospital system’s operating model — and the negative impact due to the cancellations of these procedures cannot be overstated,” Steward told Kaiser Health News. “In addition, patients are understandably cautious and choosing to defer any nonemergency treatments or routine visits until this crisis has passed.”