As some companies work to increase employee pay amid the ongoing Wuhan coronavirus (COVID-19) crisis, Alteon Health, a major medical staffing organization, is reportedly slashing salaries, reducing time off, and trimming retirement benefits for its doctors and nurses because it says revenues are down.
According to the nonprofit newsroom ProPublica, Alteon, which is backed by private-equity firms Frazier Healthcare Partners and New Mountain Capital, says it isn’t bringing in enough cash anymore now that elective procedures are being postponed and non-coronavirus patients aren’t visiting emergency rooms. Health insurance companies are also processing claims much slower now that their workforces are largely working at home.
Even though hospital workers contracted by Alteon are now having to work long hours in dire conditions, the company isn’t willing to, or can’t, keep compensating them at the same rates because of the upheaval in other areas being caused by COVID-19.
“Despite the risks our providers are facing, and the great work being done by our teams, the economic challenges brought forth by COVID-19 have not spared our industry,” stated Steve Holtzclaw, Alteon’s CEO, in a memo recently sent out to company employees.
In addition to reducing hours for clinicians, Alteon is also cutting pay for its administrative employees by 20 percent, as well as suspending 401(k) matches. Bonuses and paid time off are also getting the axe, though Holtzclaw says this is all temporary.
At the same time, Holtzclaw couldn’t say how long these temporary changes might last, which means they’re indefinite at best. Salaried physicians have now been demoted to an hourly rate, which combined with reduced hours means they won’t be making nearly as much as they were before the pandemic – even though hospitals are soon to be completely overrun with Wuhan coronavirus (COVID-19) patients.
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Alteon employees who aren’t thrilled with the new setup are being given the option to contact the company’s human resources department within five days “to discuss alternatives.” What these alternatives entail, however, hasn’t been publicly disclosed.
Meanwhile, some Alteon employees are coming forward, at least anonymously, to air their grievances about the changes. One told ProPublica that the changes are “completely demoralizing,” adding that “at this time, of all times, we’re putting ourselves at risk but also putting our families at risk.”
To protect their families, some Alteon medical staff have taken it upon themselves to live separately in isolation, which means added costs and living expenses. And now with these cuts taking place, they’ll be even more financially put out, possibly to a breaking point.
“A lot of sacrifices are being made on the front line that the administration is not seeing because they’re not stepping foot in a hospital,” this same Alteon employee told ProPublica. “I’ve completely lost trust with this company.”
At the same time that Alteon is upending its company operations in this way, competitor TeamHealth is reportedly keeping everything the same, which really calls into question the legitimacy of Alteon’s claim that it has to cut everyone’s pay and benefits in order to remain afloat.
“We are not instituting any reduction in pay or benefits,” TeamHealth told ProPublica. “This is despite incurring significant cost for staffing in anticipation of surging volumes, costs related to quarantined and sick physicians, and costs for PPE as we work hard to protect our clinicians from the virus.”
When a request was made for comments on the situation, neither Frazier Healthcare Partners nor New Mountain Capital immediately responded to ProPublica with any explanation.
To keep up with the latest news about the Wuhan coronavirus (COVID-19), be sure to check out Pandemic.news.
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