Seattle-based UW Medicine is anticipating its financial losses will exceed $500 million by the end of the summer due to a dip in clinical revenue from the COVID-19 pandemic.
The three-hospital academic health system said that the losses are due to the cancellation of elective procedures coupled with increased expenses to boost diagnostic testing and acquire protective gear.
To help offset the losses, UW Medicine said it plans to take "urgent actions to reduce expenses."
Those actions include pay cuts for senior leaders, staff furloughs and tight spending controls.
"I sincerely regret that our path to financial stability includes reductions in compensation, but I believe the actions we are taking will support the excellence of the UW Medicine clinical, research and educational programs," said Paul Ramsey, MD, UW Medicine CEO.
The health system also plans to seek COVID-19 relief funds from federal and state programs.
UW Medicine said it will meet with faculty and staff to determine the extent of the cuts and discuss the full recovery plan.