UTMB to cut pay, hours ‘to pay the piper’
GALVESTON — Facing a $40 million deficit due to the COVID-19 outbreak, the University of Texas Medical Branch at Galveston will be reopening clinics, cutting salaries and reducing work hours for employees.
The health care system is losing as much as $1.5 million per day since the coronavirus outbreak forced its hospitals to cease all nonessential medical procedures, Dr. Ben Raimer, interim president of UTMB, told reporters on a conference call Friday. The medical branch has also spent $13 million on personal protective equipment for employees and testing materials for the virus.
“We’re spending a lot of money and not making a lot of money,” Raimer said. “Now has come the time for us to sort of pay the piper. We’ve been losing $1.5 million a day. We find ourselves at this time over $40 million in the hole and facing more bills as they roll in.”
UTMB has faced operating deficits in the past, leading to layoffs and a reduced workforce, but Raimer said they are hoping to avoid that fate by instituting several cost-cutting measures.
The medical branch has had to dip into its 100-day cash reserve, Raimer said.
With state and federal aid unlikely given the declining national economy, the medical branch will be forced to take incremental cost-cutting steps in the coming weeks.
Beginning on May 1 through the end of June, Raimer said UTMB is asking all of its employees to take one day off every week using vacation or other paid time off. Employees who are eligible for incentive and bonus pay — nearly 400 of the medical school’s 900 employees, according to Raimer — won’t receive them this year.
Overtime pay also will be eliminated, and the medical branch will reduce its reliance on outside labor. Raimer is also asking employees to contribute to a Covid Recovery Fund the medical branch will establish in hopes of bridging its operating deficit.
“We anticipate the things that
“We’ve been losing $1.5 million a day. We find ourselves at this time over $40 million in the hole and facing more bills as they roll in.”
Dr. Ben Raimer, interim president of UTMB
we have rolled out with our staff today, that guarantees them continued employment, will get us through this period of time,” Raimer said, adding that the eight-week cost-cutting measures could be extended if the medical branch continues to lose money.
The reductions should not impact the Galveston National Laboratory, a high security biocontainment lab run by UTMB, which continues to receive federal grant funding in its efforts to develop a vaccine and test antiviral medication for the new coronavirus.
The medical branch also will begin a phased reopening of its clinics next week, which were closed as a result of Gov. Greg Abbott’s March 31 executive order barring all nonessential medical procedures.
“Lots of people who had tests procedures canceled weeks ago who have waited patiently,” Raimer said. “We have looked at them and selected a group of people who cannot wait any longer.”
Raimer noted the decision to reopen UTMB clinics, while clearly financially motivated, comes as Galveston County has seen new coronavirus cases stabilize over the last 10-14 days.
Raimer was worried at the outset of the global pandemic that the hospital system might not have the bed capacity to handle a heavy influx of new patients, but said Friday that UTMB never even approached 50 percent capacity at any of its hospitals.
“Even if we had a resurgence of (COVID-19), our hospitals would be able to handle that,” Raimer said.
Yet Raimer acknowledged that the region is a long way from declaring victory over the virus.
The medical branch has tested over 7,000 people for the virus at its various locations, but Raimer said testing capacity would have to increase as social distancing restrictions begin to loosen.
“The new norm for most of us is really gonna be having COVID patients in our community and in our hospitals along with all the other things we treat until there’s a vaccine or medication cure found,” he said.