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With Patient Volumes Cut In Half, Local Hospitals Lost Millions

May 27, 2020

Tracy Doherty was let go from her job as a pediatric nurse at Valley View Hospital in early May. The hospital’s CEO is projecting $30-45 million in lost income this year, which led to staff cuts.
Credit Courtesy of Tracy Doherty

When the pandemic took hold, Tracy Doherty kept going to work as a pediatric nurse at Valley View Hospital. Her line of work usually comes with some stability, so she was surprised when she was laid off earlier this month. 

 “Being a nurse you kind of never expect to lose your job,” Doherty said. “I knew they were going to be cutting staff, but I didn't think it would be nursing staff.”

 Valley View let go of about 100 employees, or roughly 10% of their workforce. Reduced patient volumes meant the hospital was facing substantial losses, leading to pay cuts for executives and layoffs of both administrative staff and patient-facing workers.

 “I really loved working for Valley View,” Doherty said. “I loved my position there and I know that I was needed. And for them to have to let me and so many other staff members go, it was kind of scary that it had gotten to this point.” 

"For them to have to let me and so many other staff members go, it was kind of scary that it had gotten to this point."

Brian Murphy, Valley View’s CEO, said the layoffs were a painful decision, but money was disappearing fast.

“It was very apparent that we needed to take a very hard look at where we could try to do more with less employees, to be perfectly honest,” Murphy said, “and look for opportunities to reduce our expenses.” 

The financial trouble can be traced to March, when Colorado Gov. Jared Polis declared a statewide ban on elective surgeries.

“Like it or not, the reality of hospital revenue in 2020 – just like the last several decades – is that we are extraordinarily reliant on those elective procedures to generate the revenue that affords us the opportunity to fulfill the services that we are accustomed to fulfilling,” Murphy said.

Murphy said the hospital’s 2020 income is projected to total $30-45 million less than planned. Cutting salaries and benefits – which Murphy called “the bulk” of hospital expenses – was one way to move towards recovery. 

Some hospitals were overwhelmed with COVID-19 patients, putting a strain on space and resources. But Valley View has only seen 17 patients with the virus since the outbreak began, and normal patient levels have fallen drastically.  

"We are extraordinarily reliant on those elective procedures."

“Really, over this COVID crisis we have not been very busy,” Murphy said. “We've seen reductions through our emergency room – probably 50% of our historical volumes. Because we weren't doing the elective procedures, the amount of admissions and patient care inside the hospital also dropped by at least 50%.”

Smaller hospitals in the area have fared better.

Just down the road in Rifle, Grand River Hospital lost only about $5 million, and recouped most of that with federal aid. Jim Coombs, Grand River’s CEO, said their small size has made it easier to ride out the pandemic.

Coombs said Grand River’s patient volumes were also halved, and the ban on elective surgeries stung. Elective surgeries were allowed to resume statewide in mid-April, which Coombs said was driving patient volumes back up toward normal levels. 

Aspen Valley Hospital is projecting $23 million in losses this year, but has not made layoffs. The hospital’s patient volumes were also lower, and elective surgeries were put on pause.  Dave Ressler, Aspen Valley’s CEO, said they did not have to take the same measures as Valley View partially due to a difference in scale. 

“We’re two very different hospitals,” he said. “They’re considerably larger than we are.”

Ressler said the hospital’s cash reserves and federal stimulus money helped Aspen Valley Hospital avoid layoffs or pay cuts. They did, however, suspend some facility upgrades and the purchase of hospital equipment.

"We are still in the thick of it and we don't really know what the edge of the woods looks like yet."

Ressler also said the pandemic – and the potential for more substantial financial impact – is not over. Although Aspen Valley has not had to make any cuts so far, they are not out of the woods yet.

“We are still in the thick of it and we don’t really know what the edge of the woods looks like yet,” Ressler said.

Tracey Doherty, the nurse laid off from Valley View, said she has a lot of respect for those still working on the frontlines. Even though she is not in the hospital anymore, she still feels aligned with their cause. 

“It’s kind of like we’re all in this together, and even though I’m not an employee anymore I feel like I’m kind of fighting with Valley View. So it’s kind of bittersweet, that I had to be the one they let go,” she said.

However, she said she understands layoffs were necessary. For now, Doherty has been using the extra time to relax, get outside and enjoy a few moments away from the front lines.