Trinity Health's operations and finances were significantly affected by the COVID-19 pandemic during the last half of March, and the negative effects are continuing in the current quarter, the Livonia, Mich.-based health system said in bondholder documents filed June 29.
Though the duration of the pandemic and its ultimate impact on Trinity Health's finances is unknown, health system management expects operating revenue to remain below historical levels for much of next fiscal year until a vaccine is available and patient volume returns to pre-pandemic levels.
The 92-hospital system is projecting operating revenues of $17.3 billion in fiscal year 2021, which begins July 1. That's down from $19.3 billion in fiscal year 2019. Trinity hasn't released full-year operating and financial results for fiscal 2020, which ends June 30. During the first nine months of the current fiscal year, Trinity saw revenues decline less than 1 percent year over year to $14.2 billion.
As a result of the lower revenue projections, the health system announced it is cutting costs by eliminating positions, laying off employees, and implementing extended or new furloughs and reductions in schedules. The new cuts come after Trinity announced plans in April to furlough 2,500 employees.
To help offset financial damage, Trinity Health received funds from the $175 billion in relief aid Congress has allocated to hospitals and other healthcare providers to cover expenses and lost revenues tied to the pandemic. The health system said it received a total of $600 million in federal grants in April and May. Trinity Health also applied for and received $1.6 billion of Medicare advance payments, which must be repaid.
The health system said June 29 that the federal financial support doesn't cover operating losses incurred as a result of the pandemic.
In a message to employees, Trinity Health CEO Michael Slubowski said the health system "vigorously lobbied" for additional federal relief aid, cut non-labor expenses and explored all alternatives before deciding to make job cuts, according to the Beaumont Enterprise.
"But when $2 billion of revenue goes away overnight, it is impossible to close the gap without making difficult cost reduction decisions, including the size of our workforce," Mr. Slubowski wrote. "Our healing ministry must survive for the benefit of the communities we serve."