Hospitals furloughed thousands while paying CEOs big
Larger, wealthier systems getting more bailout funds than poorer ones
HCA Healthcare is one of the world’s wealthiest hospital chains. It earned more than $7 billion in profits over the last two years. It is worth $36 billion. It paid its chief executive $26 million in 2019.
But as the coronavirus swept the country, employees at HCA repeatedly complained that the company was not providing adequate protective gear to nurses, medical technicians and cleaning staff. Last month, HCA executives warned that they would lay off thousands of nurses if they did not agree to wage freezes and other concessions.
A few weeks earlier, HCA had received about $1 billion in bailout funds from the federal government, part of an effort to stabilize hospitals during the pandemic.
HCA is among a long list of deep-pocketed health care companies that have received billions of dollars in taxpayer funds but are laying off or cutting the pay of tens of thousands of doctors, nurses and lowerpaid workers. Many have continued to pay their top executives millions, although some executives have taken modest pay cuts.
The New York Times analyzed tax and securities filings by 60 of the country’s largest hospital chains, which have received a total of more than $15 billion in emergency funds through the economic stimulus package in the coronavirus relief bill.
The hospitals — including publicly traded juggernauts like HCA and Tenet Healthcare, elite nonprofits like the Mayo Clinic, and regional chains with thousands of beds and billions in cash — are collectively sitting on tens of billions of dollars of cash reserves that are supposed to help them weather an unanticipated storm. They awarded their five highest-paid officials about $874 million in the most recent year for which they have disclosed their finances.
At least 36 of those hospital chains have laid off, furloughed or reduced the pay of employees as they try to save money during the pandemic.
Industry officials argue that furloughs and pay reductions allow hospitals to keep providing essential services at a time when the pandemic has gutted their revenue.
But more than a dozen workers at the wealthy hospitals said in interviews that their employers had put the heaviest financial burdens on front-line staff, including low-paid cafeteria workers, janitors and nursing assistants. They said pay cuts and furloughs made it even harder for members of the medical staff to do their jobs, forcing them to treat more patients in less time.
Even before the coronavirus swept America, forcing hospitals to stop providing lucrative nonessential surgery and other services, many smaller hospitals were on the financial brink. In March, lawmakers sought to address that with a vast federal economic stimulus package that included $175 billion for the Department of Health and Human Services to hand out in grants to hospitals.
But the formulas to determine how much money hospitals receive were based largely on their revenue, not their financial needs. As a result, hospitals serving wealthier patients have received far more funding than those that treat lowincome patients, according to a study by the Kaiser Family Foundation.
The bailout money, which hospitals received from the Health and Human Services Department without having to apply for it, came with few strings attached.
Katherine McKeogh, a department spokeswoman, said it “encourages providers to use these funds to maintain delivery capacity by paying and protecting doctors, nurses and other health care workers.” The legislation restricts hospitals’ ability to use the bailout funds to pay top executives, although it does not stop recipients from continuing to award large bonuses.
The hospitals generally declined to comment on how much they are paying their top executives this year, although they have reported previous years’ compensation in public filings. But some hospitals furloughing front-line staff or cutting their salaries have trumpeted their top executives’ decisions to take voluntary pay cuts or contribute portions of their salary to help their employees.