Thousands of workers at St. Elizabeth Healthcare will receive 2% pay raises as of June 14, said Garren Colvin, CEO of the $1.3 billion hospital system that is the dominant medical provider in Northern Kentucky.
Edgewood-based St. Elizabeth has 9,052 employees – and is looking to hire more, Colvin told me. All current employees will get the raise except those who work under contract, which would exclude the 371 physicians employed by St. Elizabeth. The increases will be reflected in July 3 paychecks.
Unlike other local hospital systems, St. Elizabeth hasn’t reduced pay, furloughed or laid off any employees amid the Covid-19 pandemic – despite forgoing tens of millions of dollars in revenue because of a state-mandated ban on lucrative elective procedures.
The ban, which ran from mid-March to mid-May in Kentucky, was part of an effort to ensure bed space for a possible surge in Covid-19 patients as well as to preserve personal protective equipment such as face masks and gloves.
“Through the eight weeks, we were probably down $85 million in net revenue,” Colvin told me. “Because of the CARES Act and the CMS advances, our cash position was a lot more manageable than you would have thought when it first started.”
St. Elizabeth received $32 million via the CARES Act, which stands for Coronavirus Aid, Relief and Economic Security. The federal program was intended to help hospitals and other health care providers on the front lines of the coronavirus response survive the economic impact of the crisis.
“We’re still operating on a negative basis, but we’ve put a big dent in how much were losing daily,” Colvin said. “Our May numbers look much better than April. In June, we hope to be on a positive margin for the month – though not on a year-to-date basis. Our volume in June should be significant enough that we are back to normal operations.”
Most areas of the St. Elizabeth system are now at full operation, Colvin said. Employees such as athletic trainers, who don’t have the ability to work with high schools closed, have been redeployed to jobs such as checking the temperatures of people entering St. E hospitals and escorting visitors to patient rooms to ensure it’s a safe process.
“We’re continuing to guarantee anybody in a position that can’t work because of what’s going on still has a job,” Colvin said. “And for anyone who’s pregnant or high risk (of contracting Covid-19), we’ve reassigned them as well.”
He noted that the Kentucky ban lifted May 13, when hospitals were permitted to resume non-emergency procedures at 50% of pre-pandemic patient volume. St. Elizabeth and other Kentucky systems were allowed to return to full capacity May 27. A similar restriction in Ohio ended May 1 for outpatient procedures.
It was vital to retain St. Elizabeth employees to ensure the system could ramp back up quickly after the restrictions were lifted, Colvin said.
“If we can get to a positive margin in June, it’s because we didn’t lay anybody off or furlough anybody,” Colvin said. “It’s because we left our team whole. This was our strategy.”
Now, “we’re quasi back to normal,” he said. “We felt like the volume is where it needs to be (to justify the raises).
“We budgeted for and thought it was important, so we provided a salary increase for our work force,” he said. “It was 2% across the board for non-contract associates. The main motivation is to protect the workforce that is taking care of this community. Our finance team had us in a great pre-Covid position. Our cash position was strong enough to last.”
He credited Lori Ritchey-Baldwin, chief financial officer of St. Elizabeth, for helping keep the system on a strong financial footing.
In addition, “everything we’ve done is possible because of the leadership and support of our board of trustees,” Colvin said. “They know the importance of fiscal responsibility, community support and the operations to make both of those successful.”
Debbie Simpson, former president and co-owner of Multi-Craft printing of Newport, is chair of the board at St. Elizabeth.
The pay raise was a way to thank St. E employees for their continued commitment to patients and the community during such a challenging time.
“This crisis has the ability to tear communities, industries and economies apart,” Colvin noted in a memo to employees announcing the pay raise. “But in true St. Elizabeth character, we faced it as a united front, locked arms and did not waver no matter our personal fears.”