Mount Nittany Health eliminates 250 positions, citing $70 million revenue shortfall
Mount Nittany Health announced Thursday a second wave of cuts to combat revenue shortfalls and a reduction in patient volume due, at least in part, to the coronavirus pandemic.
The State College-based health care system eliminated about 250 positions, about 10% of its staff, to address an expected $70 million revenue shortfall, according to a news release.
Executive compensation and spending on contracted services and supplies was also reduced by 10%, the organization said.
Mount Nittany received $9 million from the federal government’s $2.2 trillion coronavirus relief bill, spokeswoman Anissa Ilie said.
“Changes that impact people are never easy nor taken lightly. We recognize the impact this will have on dedicated employees who are on the front lines of serving the community,” Mount Nittany President and CEO Kathleen Rhine said in a statement. “We deferred it as long as we felt we could. We have a strong team and a strong mission and I am confident in our ability to successfully adjust our operations.”
Mount Nittany announced in May about 50 administrative and managerial positions were reduced. All areas of patient care were down between 50% to 80% and the company anticipated an about $30 million revenue shortfall.
The health system does not plan to reduce programs and services, and expects to maintain appropriate nurse-to-patient ratios.
“Our priority remains serving the community with high-quality care. Like most health systems across the country, we are experiencing a significant impact from the pandemic,” Rhine said. “While we must adjust, we are doing this without reducing the services the community depends on us to provide. The actions we are taking ensure that we can serve the community well today and remain strong to grow into the future.”
Caregivers are “deeply dismayed” by the “drastic” cuts and question whether the health system will be able to maintain its level of care and necessary nurse-to-patient ratios, Denelle Weller, president of the Mount Nittany Medical Center Chapter of SEIU Healthcare Pennsylvania, said in a statement.
“We are aware of the setback caused by and hurdles suffered by healthcare facilities everywhere because of the recent COVID-19 pandemic,” Weller said. “Yet, we believe a projected loss of revenue for a designated period of time is not reason enough to make drastic cuts at our normally very profitable community hospital. . ... Most experts are projecting a second wave of COVID-19 infections and we urge hospital administrators to be thoughtful about preparing for such an event.”
Hospitals throughout the Keystone State limited or stopped certain operations for much of the spring to mitigate the potential spread of COVID-19.
State Senate Majority Leader Jake Corman, R-Benner Township, reacted to Thursday’s announcement by saying he pushed Gov. Tom Wolf to allow hospitals to continue with treatments and surgeries until there were signs of a local COVID-19 surge.
Instead, many hospitals were “sitting empty,” Corman said in a statement.
“He did not listen and our community will continue to pay the price,” Corman said. “Gov. Wolf’s victory lap yesterday on his handling of COVID-19 in the commonwealth is a slap in the face of those who continue to suffer as a result of his unilateral decisions.”
The state Senate plans to vote next week on a bill that would appropriate money from the coronavirus rescue package — something Wolf said state Republicans have failed to do for months.
His administration focused on providing personal protective equipment and accelerated the creation of a new $450 million Hospital Emergency Loan Program, spokeswoman Lyndsay Kensinger wrote in a statement.
“The administration has delivered on its promise to support hospitals throughout this crisis and we’re hopeful that the general assembly will continue to partner with us to support all businesses as we transition through the phased reopening process,” Kensinger wrote.
This story was originally published June 18, 2020 at 2:41 PM.