DETROIT — Henry Ford Health System reported a net loss of $234.5 million in the first quarter due to the widespread COVID-19 pandemic. The Detroit-based company says it will furlough 2,800 employees across its six hospitals.
In explaining the losses, the health system cited temporary closures, an increased need for caring for COVID-19 patients, and the postponement or cancellation of services and procedures. Additionally, the company expects losses in April and May to surpass the March total.
The furloughed employees are those not directly involved in patient care and those from areas where workloads have been drastically reduced or operations have been temporarily closed. Henry Ford Health System employs more than 30,000 people.
Executives at Henry Ford Health System will donate between 10 and 25 percent of their salaries to two funds meant to help furloughed employees. The two funds are the newly created COVID-19 Emergency Needs Fund and the Bob and Sandy Riney Helping Hands Fund, which was created in 2012 to help support employees experiencing unexpected hardships.
The health system lost $43 million in net operating income (NOI) in March, and net operating loss for the first three months of 2020 was $36.2 million. The company had a positive NOI of $39.4 million during the same period in 2019.
The numbers were even more dire for non-operating income — things like investments and gift shop sales unrelated to the actual care of patients. In the first quarter, the health system lost $198.3 million, compared to a positive non-operating income of $81 million during the same period in 2019.
Henry Ford Health System isn’t the only care provider in Michigan to have to layoff staff. Earlier this week, Royal Oak-based Beaumont Health laid off 2,475 of its employees, citing similar reasons as Henry Ford Health.
Michigan has seemingly been one of the hardest hit states by COVID-19, reporting a 24 percent unemployment rate statewide. According to the Bureau of Labor Statistics, the estimated unemployment rate nationwide is between 10 and 15 percent.
— Alex Tostado