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Report: Mayo Clinic furloughed 23,000 workers after $170 million bailout

A report by the New York Times found that many of the nation's wealthiest hospitals found ways to not pay workers even after $15 billion in bailout funds.

A report by the New York Times found that many of the nation's wealthiest hospitals found ways to not pay workers even after $15 billion in bailout funds. Glen Stubbe, Star Tribune

When the COVID-19 pandemic hit the United States, the nation’s 60 largest hospital chains received more than $15 billion in emergency funds from the federal government, according to the New York Times.

The Times sifted through the tax and securities filings of each of those chains and found that altogether, they’re “collectively sitting on tens of billions of dollars of cash reserves that are supposed to help them weather an unanticipated storm.”

At least 36 of these hospital chains have also laid off, furloughed, or cut the pay of their employees in order to save money during this crisis. Among those is Rochester’s Mayo Clinic.

According to the Times, Mayo received a whopping $170 million in bailout funds, but is furloughing or reducing the working hours of some 23,000 employees.

“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,” the Times says.

A dozen workers at these hospitals told the newspaper the “heaviest financial burden” has fallen on front-line staff: cafeteria workers, custodians, nursing assistants. The already lower-paid workers got the cuts in wages and hours, they said, and their absence only makes it harder for doctors and nurses to do their jobs.

A spokesperson with Mayo told City Pages the clinic adjusted its normal services in mid-March to focus “entirely” on COVID-19 preparedness. This included investing in treatment, testing, and research, “while also protecting… staff and patients by significantly limiting non- and semi-urgent care.”

“Mayo Clinic will apply these federal and state emergency relief funds towards lost revenue and expenses associated with significant investments in testing, protective and medical equipment, and unanticipated costs to allow us to meet the needs of our patients during the COVID-19 pandemic,” the statement said.

The spokesperson said the amount of relief funds it receives is still “somewhat in flux” as the clinic works through details of how the CARES Act divvies it up.

Mayo confirmed that 23,000 staff had been placed on furlough or had their hours reduced – 5,500 for “longer” periods of time. That number has since dropped to 17,000, as some staff have returned to work in May and June.

Zack Cooper, an associate professor of health policy and economics at Yale University, expressed skepticism about how the bailouts are being appropriated and used in the Times piece. One of the goals of the bailouts, he said, was to avoid job losses in health care.

“However, when you see hospitals laying off or furloughing staff,” he said, “It’s pretty good evidence the way they designed the policy is not optimal.”