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How COVID-19 has affected Northeast Georgia Health System finances
NGHS cutting jobs and hours, plans furloughs as revenue sinks
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Nurses and staff work in a dedicated COVID-19 Intensive Care Unit on the fifth floor of Northeast Georgia Medical Center Gainesville’s South Patient Tower. - photo by Northeast Georgia Health System

During the COVID-19 pandemic, the Northeast Georgia Health System has seen a decline in admissions at its hospitals, which has led to an expected revenue loss of $200 to $250 million through September.

NGHS is eliminating 81 positions, furloughing 27 employees and reducing some employees’ hours through September, CEO Carol Burrell said in a statement Friday. The system is also freezing recruitment for 167 open positions.

The system has seen reductions in patient volumes in all departments, including 50% in the emergency department, 70% in outpatient surgery and up to 100% in outpatient rehabilitation and some physician practices, Chief Financial Officer Brian Steines said. NGHS fell 15% short of expected admissions in March, 29% short in April and was projected to fall 21% short in May as of May 27.

The best place anyone can be in those situations is in a hospital, and our staff is taking all precautions possible to keep them safe while they are here.
Chief Financial Officer Brian Steines

“We want to encourage everyone to not be afraid to come to the hospital if you need care. We’ve seen a reduction in the number of patients coming to our hospitals for heart attacks, strokes, miscarriages and other health emergencies — and delaying that care is life-threatening,” Steines said in an email. “The best place anyone can be in those situations is in a hospital, and our staff is taking all precautions possible to keep them safe while they are here.”

Extra costs such as personal protective equipment, converting rooms for COVID-19 patients into negative pressure spaces and changing medical and surgical rooms into ICU spaces added to the financial impact, he said. While 7% to 8% of NGHS patients are usually indigent, in March and April, that number was more than 12%, Steines said.

Hospitals also saw price increases on some supplies. For example, N95 masks cost 50 cents each before the pandemic, but costs rose to as much as $5 per mask, Steines said.

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N95 respirator masks are stored in bags along the wall of Northeast Georgia Medical Center in Gainesville. At the end of their shifts, employees put their masks in paper bags and place those bags in plastic bags with their names on them to extend the life of the PPE. - photo by Northeast Georgia Health System

NGHS has received about $54 million in federal funding from the CARES Act, the federal coronavirus relief funding legislation. Those funds will offset about 21% to 27% of the projected $200 to $250 million revenue loss through September.

Steines said that while the health system was strong financially before the pandemic, “no nonprofit health system can take this kind of financial loss without making adjustments.” 

Senior leadership is taking a 25% to 30% pay cut for the year, and NGHS paused matching employees’ contributions to their 401(k) plans through September. The system has adjusted staffing to match patient volumes in non-essential areas and is evaluating other adjustments that may be needed through September, Steines said. Expansion and improvement projects are also being reconsidered.

“While these decisions are difficult, they are necessary to ensure NGHS can continue to provide safe and high-quality care both now and in the future. As we move forward in this evolving landscape, we will continue to communicate open and honestly,” Burrell said. “We remain committed to our core values, including responsible stewardship, in order to fulfill our mission of improving the health of our community in all we do.”

As a nonprofit health system, NGHS is required by state law to disclose some of its financial data. The health system’s total liabilities and net assets were $2.1 billion in fiscal year 2018 and $2 billion in fiscal year 2017. In fiscal year 2019, the system had $61.1 million in operating income and 333 days cash on hand. In fiscal 2018, its income from operations was $43.9 million, according to the data on its website