Senior leaders, executives and physicians at Norfolk, Va.-based Sentara Healthcare are taking pay cuts to help address an anticipated $778 million shortfall against projected revenue due to COVID-19, the organization confirmed to Becker's Hospital Review.
Sentara is reducing base salaries for executives and senior leaders by 10 percent to 20 percent, and physicians' pay is being cut "to achieve an overall 10 percent reduction," Sentara COO Mike Gentry said in an email to staff May 20. All employees will also forgo annual market and merit salary increases, and 403(b)/401(k) matching contributions will be suspended.
Sentara spokesperson Dale Gauding attributed the changes to a decrease in patient volumes after the suspension of routine services during the pandemic.
"The changes we made affect everyone at every level," he wrote in an email statement to Becker's. "We understand these temporary economic measures will present challenges for our employees, but they are necessary to preserve jobs and keep our dedicated team intact, which is our priority. Our team has done incredible work to keep our community safe and save lives, and we are grateful for their continued commitment."
The pay cuts are part of the first phase of cost reductions. Mr. Gentry said other areas being researched for potential reductions include real estate, construction, capital projects, and analysis of contracts and vendor agreements.
Sentara has 30,000 employees.