Essentia Health to permanently lay off 900 workers

The COVID-19 outbreak is taking a major toll on the healthcare industry.
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Essentia Health has announced it will be making more cuts as a result from the coronavirus outbreak, which will result in 900 permanent layoffs.

The Duluth-based healthcare provider says that its losses since the pandemic arrived, causing patient volumes to drop since the beginning of March, total nearly $100 million.

While elective procedures have been allowed to restart in Minnesota, Essentia says it's taking it slow for now to minimize the risk for patients, and as a result expects further budget pain on the horizon.

It's already made efforts to cut costs, temporarily laying off 500 non-medical workers in preparation for the virus,  and has also reduced doctor and executive pay, and eliminated leadership roles.

It will now cut 6 percent of its workforce, comprising 900 staff. Those salaried and non-contracted employees who are being let go will have their health insurance covered for 3 months.

A further 850 staff are currently on administrative leave with benefits through July 31, and can be called back to work as needed.

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Essentia Health CEO David C. Herman, MD. said: "Despite our best efforts, the many cost-reduction measures we’ve taken over the last several weeks are not sufficient to preserve our mission and the health of the organization.

"This has prompted our leadership team to carefully consider the most difficult decision we’ve faced since I joined Essentia five years ago and move forward with permanent layoffs.

"I recognize and deeply appreciate all our colleagues’ contributions. While the COVID-19 crisis has resulted in significant shifts in society and how we care for our communities, our commitment to safe, high-quality patient care is unwavering.

"As painful as these actions are for all of us at Essentia, we are taking these steps to ensure Essentia is here to make a healthy difference in people’s lives, today and into the future."

The layoffs come on the same day Minnesota's effective unemployment rate has risen to 8.1 percent, the highest it's been since 1983.

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