University of Iowa Hospitals: Layoffs a last resort despite facing $100 million loss

University of Iowa Hospitals and Clinics in Iowa City, Iowa. (TAYLOR HOLT/KCRG)
University of Iowa Hospitals and Clinics in Iowa City, Iowa. (TAYLOR HOLT/KCRG)(KCRG)
Published: May. 20, 2020 at 1:19 PM CDT
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The University of Iowa Hospitals and Clinics could be facing more than $100 million in loss through June due to the coronavirus pandemic. But it says it has not planned any layoffs.

UIHC will instead look to other cost-cutting options, considering layoffs a last resort.

Suresh Gunasekaran, MBA, CEO of University of Iowa Hospitals and Clinics and associate vice president of UI Health Care, said restrictions around elective surgery and other state mandated restrictions, along with a drop in patients have caused the financial loss.

“Even though we have seen a significant number of patients, our revenue is off of what it used to be and it has not returned to pre-covid levels,” Gunasekaran said. “That’s been a pretty significant impact on our finances.”

Gunasekaran said even though UIHC is a state organization, they receive no state funding. UIHC has, however, received about $35 million in federal stimulus funds. And while that’s helpful, Gunasekaran says UIHC still faces a pretty significant loss.

Despite the financial losses, UIHC feels very strongly that layoffs should be the last option. However, Gunasekaran says if the crisis continues for months and years, layoffs would have to be on the table.

Gunasekaran says he’s optimistic that UIHC has the ability to get out the financial loss. They have a game plan that involves making services more efficient and as well as looking for potential savings in all aspects of surgical supplies and equipment, in either purchasing or maintenance. Additionally, administrators will consider postponing maintenance, reassessing supply chains, and purchasing practices for more potential savings.

Additionally, UIHC will be considering measures like forgoing raises, temporary pay cuts, potentially eliminating open positions and delaying recruitment.

UIHC has the ability to do telemedicine and more specialty services, and Gunasekaran says he thinks those will help, along with measures taken to make services more efficient. UIHC hasn’t made final decisions on cost-cutting measures just yet.

As the governor continues to allow more businesses to reopen across the state, UIHC thinks residents will begin to get more comfortable seeking healthcare again.

“Our society as a whole is trying to figure out how to stay safe,” Gunasekaran said. “We’ve done so many things to encourage folks, rightfully, to socially distance, to only go out when necessary. And it took us a long time to convince people to do this. And now, to convince folks it’s ok to come back and use the healthcare system is taking time.”

Gunasekaran says he is optimistic about being able to continue serving the community moving forward. In fact, he says it might just be the easiest time to get into University of Iowa Health Care.