Essentia Health announced it is laying off 900 employees with about 79 of those coming from the Brainerd lakes area.
The total recent layoffs affect about 6% of Essentia’s workforce. Essentia employs 1,535 people locally, including Essentia Health-St. Joseph’s Medical Center and its area clinics.
Essentia reported it will continue to provide health insurance for noncontract employees for the next three months. Staff covered by collective bargaining agreements have other protections, including the right of recall. Additionally, about 850 Essentia staff members are on administrative leave with benefits through July 31, with the intention of being called back to work as needed, the company reported in a news release Thursday, May 18.
Minnesota hospitals and health systems expect to lose almost $3 billion in the first three months responding to COVID-19, Essentia reported.
“At Essentia, our operational losses due to pandemic-related declines in patient volumes since the beginning of March have totaled nearly $100 million, with more losses on the horizon,” the medical provider reported. “We have worked to offset the significant decline in revenue while prioritizing patient and staff safety.”
Essentia reported some of the changes it has implemented include placing employees on administrative leave, flexing hours, reducing physician and executive leader compensation, restructuring and eliminating leadership roles, limiting capital expenditures and reducing services and discretionary spending.
“Despite our best efforts, the many cost-reduction measures we’ve taken over the last several weeks are not sufficient to preserve our mission and the health of the organization,” said Essentia Health CEO Dr. David C. Herman, in a news release. “This has prompted our leadership team to carefully consider the most difficult decision we’ve faced since I joined Essentia five years ago and move forward with permanent layoffs.”
About 55% of the employees affected by the workforce reduction are located in the Twin Ports area with Essentia reporting less than 10% of those impacted by the layoff in Brainerd and less than 20% are located in Essentia’s West Market, which includes Fargo, North Dakota and Detroit Lakes. About 15% are in Essentia’s East Market regional locations.
“The hardships caused by the COVID-19 pandemic continue to grow across our nation and at Essentia Health. Essentia is not alone in facing the pandemic’s severe financial impacts while providing high-quality, patient-centered care to our communities,” Essentia stated in the news release. “While surgeries and procedures are restarting at our facilities, we are approaching that process carefully and slowly to protect our communities, patients and staff, preserve personal protective equipment and ensure available hospital beds for COVID-19 patients.”
Essentia Health laid off 500 non-medical staff across the system in March. Essentia, which is based in Duluth, employs about 14,500 people in Minnesota, Wisconsin and North Dakota.
Brainerd lakes area
In an interview via Zoom, Essentia Health’s Dr. Jon Pryor said the changes won’t affect the quality or safety of care in the Brainerd lakes area.
Pryor, Essentia’s East Market president, oversees the health system’s northeastern Minnesota and northwestern Wisconsin facilities and previously served as CEO for Hennepin Healthcare System in Minneapolis. Pryor said the group in the Brainerd lakes area is outstanding and some of the system’s best leaders come from this area.
Pryor said in considering the layoffs Essentia focused on nondirect patient care areas and with an eye to the future, looking at what may not come back after the coronavirus pandemic ends. Essentia has been leading the way in virtual visits, connecting health care providers and patients digitally. Pryor said they went from zero virtual visits to 3,000 a day and 25% of all virtual visits in Minnesota are by Essentia.
Virtual visits are a great way to bring health care to people where they live and that option is one customers want, Pryor said.
“We don’t think people are going to want to go back to what it was before,” he said, noting the expectation is it will never go back to what it was before the pandemic. That translates to a drop in registering and welcoming people for in-person clinic visits. Some of those positions are unlikely to ever come back, Pryor said.
In looking at the layoffs, Pryor said they used benchmarks tools looking at data and need for employees. Pryor said everyone in the system has an important role in patient care from the health care providers to those who take care of the facilities or provide nutrition.
“That is what makes this whole thing so difficult,” Pryor said. “... This is painful for us. We are grieving through this process.”
Pryor said about 80% of the layoffs are in nondirect patient care with 20% are in direct patient care, including a few nurses and doctors, but not many, and most of those were through early retirement, including administration. Mike Larson, vice president of operations, is continuing in his role in Brainerd.
Of those 850 staff members on furlough, Pryor said the anticipation is they would be called back but much depends on when the surge happens.
“Right now we hope, pray and expect them to be called back at some point,” Pryor said.
He pointed to Essentia-Health St. Joseph’s work in the area and strength of employees and leadership.
“That is a major hub for us,” Pryor said, adding there are plans to grow in the area. Pryor said one of the reasons he’s so proud to work at Essentia is its innovation, like the work done with telehealth and virtual visits. Pryor said they are trying to show how health care can be provided in the future and he is optimistic looking ahead. “We will get on the other side of COVID-19,” Pryor said.
Pryor said COVID-19 is greatly affecting the health system as people put off health care visits for other needs. Essentia’s message was it’s safe to get care when people need it from immunizations to those experiencing heart issues. Pryor said people have even delayed coming in when they are experiencing heart attacks. As people delay regular visits, Pryor said those who are coming in for care are experiencing a greater severity of their illness.
Essentia has worked hard to make sure it’s safe for people from wearing masks to social distancing and disinfecting, Pryor said, adding they are adding those elective procedures methodically with the safety of employees and patients at the forefront. Those elective surgeries may be for hernia operations, eye nose or throat issues, tonsillectomies, foot surgery or joint replacement. They are also keeping an eye on supplies for personal protective equipment and inpatient occupancy so they can also handle a surge of COVID-19 patients.
In Essentia’s announcement Thursday, CEO Herman also pointed to the future.
“I recognize and deeply appreciate all our colleagues’ contributions,” Herman stated. “While the COVID-19 crisis has resulted in significant shifts in society and how we care for our communities, our commitment to safe, high-quality patient care is unwavering. As painful as these actions are for all of us at Essentia, we are taking these steps to ensure Essentia is here to make a healthy difference in people’s lives, today and into the future.”