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Facing $70 Million Shortfall, Mount Nittany Health Will Layoff 250 Employees

by on June 18, 2020 2:30 PM

Mount Nittany Health will eliminate about 250 jobs — approximately 10 percent of its staff — as it faces mounting revenue shortfalls during the COVID-19 pandemic, the State College-based health system announced on Thursday.

The layoffs are part of an ongoing restructuring operations and positions that included the announcement in May that 50 management positions were being eliminated.

Mount Nittany Health is expecting a $70 million revenue shortfall for its current fiscal year ending June 30.

“Changes that impact people are never easy nor taken lightly, Mount Nittany Health President and CEO Kathleen Rhine said in a statement. “We recognize the impact this will have on dedicated employees who are on the front lines of serving the community. We deferred it as long as we felt we could. We have a strong team and a strong mission and I am confident in our ability to successfully adjust our operations.”

A Mount Nittany Health spokesperson said "a variety of clinical and support positions will be eliminated across the system," and details will be communicated directly to staff over the next few days. 

Executive compensation also will be reduced by 10 percent, and spending on contracted services and supplies will be reduced for the coming year.

The health system does not plan to reduce programs and services. Current nurse to patient and nursing assistant to patient staffing ratios will be maintained.

“Our priority remains serving the community with high quality care,” Rhine said. “Like most health systems across the country, we are experiencing a significant impact from the pandemic. While we must adjust, we are doing this without reducing the services the community depends on us to provide. The actions we are taking ensure that we can serve the community well today and remain strong to grow into the future.”

Actions affecting union employees will be in accordance with their contract, and Mount Nittany says it also "will extend separation support" to affected non-union employees.

Like many other health systems, Mount Nittany Health saw a significant decline in patient volumes, ranging from 50 to 80 percent across all patient care areas, in the months since the onset of the pandemic. The health system continuing to reopen clinical services, including elective surgeries, emergency care, diagnostic services and physician practices that had been restricted.

“Mount Nittany Health is an important asset for this community,” Mount Nittany Health Board Chair Marty Bradley said in a statement. “We must adjust our operations and costs in response to reduced revenues if we are to remain a strong and vital asset for our community and continue providing outstanding healthcare.”

State Senate Majority Leader Jake Corman, R-Benner Township, placed blame for the layoffs on Gov. Tom Wolf.

"Months ago, I lobbied Governor Wolf to not limit access to healthcare and allow hospitals to continue with non-emergency treatments and surgeries until we saw signs of a local COVID-19 surge," Corman said in a statement. "Hospitals across the state – including Mount Nittany – were sitting empty. He did not listen and our community will continue to paying the price."

Corman said the Senate will vote on a bill next week to appropriate federal Coronavirus Aid, Relief and Economic Security Act funding to Pennsylvania hospitals.

Geoff Rushton is managing editor for Contact him at [email protected] or find him on Twitter at @geoffrushton.
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