Fayetteville hospital system furloughs more workers during coronavirus pandemic

RAEFORD, N.C. (WTVD) -- For better or worse health care in the United States still generally operates on a business model, and like many businesses in this pandemic, hospitals are struggling with their bottom line.

"What I would tell you is this is an unintended consequence of awaiting a surge of the virus," Dr. Roxie Wells, President of Cape Fear Valley Hoke Hospital in Raeford, explained to ABC11. "What concerns me is not just what we're doing now and gearing up and taking care of patients now. What concerns me is where will rural hospitals be once we are through this pandemic."

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Cape Fear Valley Health, a system of nine hospitals, on Monday announced a second round of furloughs, bringing the total number of furloughed employees to about 650. The actions follow the temporary closing of some services and rescheduling of elective surgeries and procedures, which make up the bulk of revenues to support operating costs at the hospital.

"The volume isn't just because we aren't doing elective surgeries," Dr. Wells said. "That's a large part of it, but people are heeding the call to stay home, to try to stay safe and only come if it's absolutely necessary."

In other words, social distancing is also lowering the number of patients in the Emergency Room, which is the most expensive place to seek care as hospitals offset costs of treating patients without health insurance.

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According to the North Carolina Healthcare Association, the financial toll on hospitals statewide is greater than $1 billion per month, including $800 million in missed revenues from canceling or postponing elective surgeries like hip replacements, cataracts, tonsillectomies, etc.

In Monday's announcement on furloughs, Cape Fear Valley Health pointed to other hospital systems across the country experiencing the same cash-strapped situations: Tennessee-based Erlanger Health System, Boston Medical Center, Appalachian Regional Healthcare in Lexington, Ky., and eight hospitals in Trinity Health's Michigan region.

"Once the pandemic subsides and we can open all services to full capacity, furloughed employees will be called back to work," Cape Fear Valley Health CEO Michael Nagowski said in a statement.

Even before the novel coronavirus, however, rural hospitals were warning they were in financial straits. In fact, some executives are warning of a "paradigm shift" after the pandemic ends because some hospitals may not survive without swift payment from the government and/or insurance companies for COVID-19 treatment.

"I think if money doesn't start to flow into rural hospitals, I believe you will see quite a few closings," Dr. Wells said. "Hospitals tend to be either the largest or second or third largest employer in the country. Counties will lose a tax base and I think you will then start to see all services within the county contract."