Stanford Health Care to cut workers’ wages by 20%

Employees of Stanford Health Care, including doctors, nurses and technicians who are caring for COVID-19 patients, will have their pay reduced by up to 20% starting Monday, April 27, for 10 weeks, according to a tip sheet the organization sent to workers on April 21.

The medical center briefly stated it was making the cuts due to the economic impacts of COVID-19 on the organization instead of laying off employees. The “temporary workforce adjustment” program was created as part of the hospital’s “cost-saving measure and initiatives,” hospital administrators stated. The pay reductions will apply to all employees at Stanford Hospital, Lucile Packard Children’s Hospital Stanford and, in the East Bay, Stanford-ValleyCare. Asked if the cuts included to doctors’ salaries, hospital spokeswoman Lisa Kim reiterated the cuts are “across the board.”

The employees can choose to lose pay but continue to work full-time, or work fewer hours while taking paid time off in full-day increments, or work fewer hours but take up to 96 hours of flex time as time off. If they are not eligible, they can take unpaid time off. The hospital will offer tips on how to file for unemployment insurance.

Employees were stunned by the announcement. The pay cuts will be an economic burden for many employees, said Linda Cornell, a 40-year employee and unit secretary who works at a nursing station as a sort of “air traffic controller” for the unit. There’s also concern it could affect patient care, she added.

“It’s just crazy. The governor was saying that we had the highest death rate (of COVID-19 patients) yesterday, and here they want to cut staff. I’ve never seen anything like this,” she said.

CEO David Entwistle has indicated in earlier news reports that emergency room visits at Stanford Hospital is down 40%, hospital spokeswoman Lia Kim said.

In a statement, Stanford said in part: “Stanford Health Care is navigating the unprecedented economic impact of COVID-19 and, as part of this effort, is implementing a temporary reduction in hours across the organization. The current pandemic has affected many organizations globally, and we are no exception. This is a difficult but necessary decision to sustain the long-term health of the organization so we can continue to provide critical services to the community.”

In another statement issued Monday, April 27, the medical center said the workforce adjustment is limited to the 10-week time period.

“Current reduced volumes (of patients) make it possible to implement this program at present. We anticipate that when the current shelter-in-place order is lifted, our patient volumes will return.

“We are actively preparing to resume regular operations and because of our current recovery and restoration planning and our dedicated and talented community, we are confident that we will hit the ground running.”

Hospitals such as Stanford shut down elective surgeries, a large source of revenue, under a state mandate to prepare for a surge of COVID-19 patients, but on Wednesday Gov. Gavin Newsom relaxed some of those restrictions, allowing for procedures such as heart-valve replacements, tumor removals and colonoscopies.

Cornell said she hopes that more elective surgeries can be allowed to come back on line and that they would ease the economic strain on the hospitals. In the meantime, many employees will face economic hardship. Many have already taken or used up paid time off to care for their children because schools and day care centers have closed. Although workers can use up to 120 hours of additional paid time off, they would have to pay that money back or take time off without pay, she said.

“Some families will never be able to accrue enough money to pay that back,” she said, with many employees earning $50,000 or less.

Cornell said she is on vacation, which started prior to learning about the cuts. Employees who are using up all of their vacation time now so that they can be paid will lose their opportunities to take trips with their families in the future, she added.

The hospital still has to keep things running, she said. She fears that patients will receive a lower quality of care with fewer staff on duty because they can’t get to a lot of things.

“It opens up the possibility that there will be more error and mistakes because people rush to get things done,” she said.

In its statement, Stanford Health Care refuted the notion that the cuts would impact care.

“This measure will not impact any of our operations. We continue to provide the safest, highest quality care for our patients and remain dedicated to pioneering research and effective clinical therapies to address this evolving situation. We are immensely proud of our community at Stanford Health Care, and we thank our employees for their tireless efforts and ongoing support during these challenging times,” the hospital administration stated.

Steve Trossman, a spokesman for the Service Employees International Union-United Healthcare Workers, which represents many Stanford employees, said hospital administrators notified the union of the plan less than a week before the announcement but refused to negotiate.

Addressing Stanford’s employee-labor relations executives in an open letter, 16 employees — including unit secretaries, nursing assistants, technicians and others — said that they are dismayed by the hospital’s actions.

“Stanford Health Care is now turning its back on front-line health care workers and refusing to acknowledge our input when it comes to furloughs. Your refusal to work collaboratively and negotiate is extremely disrespectful to all of us who have been coming to work every day, often without proper protection, putting our lives at risk to care for patients,” they wrote.

“You’ve presented your furlough plan as a ‘shared sacrifice’ as if this extreme measure has the same impact on the CEO who makes over $3 million/year and a housekeeper or a nursing assistant who struggle to pay rent and feed our family in the Silicon Valley on $60,000 or $70,000 a year. This shows a stark lack of empathy and understanding for the reality of our lives.”

The letter asks the hospital to reconsider. The employees propose the hospital tier its approach to cutting costs by exempting the lowest paid workers and reducing the burden on employees earning less than $100,000 a year.

Among other requests, they also ask the hospital to ensure that no workers lose or pay more for health benefits. They also ask the hospital to explain the reasoning behind the furloughs, including how much money the hospitals are actually losing as a result of COVID-19 and how much Stanford Health Care will receive in federal stimulus funds included in the CARES Act and its recent supplement.

In its April 27 statement, Stanford said union-represented employees will also participate in the temporary workforce adjustment in accordance with the terms and conditions of their collective-bargaining agreements.

“At present, over 99% of all our employees have chosen to use the paid time off option,” Stanford said.