Avera makes pay cuts
Local clinic affected by cost-saving measuresWORTHINGTON — On Tuesday, employees of Avera McKennan Hospital in Sioux Falls, S.D., learned that pay cuts of about 5 percent would soon be implemented at the facility, along with reductions to paid time off.
- Avera makes cuts
WORTHINGTON — On Tuesday, employees of Avera McKennan Hospital in Sioux Falls, S.D., learned that pay cuts of about 5 percent would soon be implemented at the facility, along with reductions to paid time off.
Employees at other Avera facilities, including Avera Worthington Specialty Clinics, 508 10th St., will face the same cuts, according to Avera McKennan spokesman Mitch Krebs.
“If it’s an Avera-owned facility, yes it does apply,” Krebs verified in a phone interview late Wednesday afternoon.
The cuts are in reaction to tough economic times and the ever-increasing costs of charity care, according to Krebs.
“The main piece was the charity care and bad debt, people who don’t have the ability to pay their bills,” Krebs explained. “We had $34 million (in write-offs) last year, and we budgeted an increase for this year, but we believe it’s going to be much higher than anticipated. It likely will top $50 million by the time all is said and done.”
Avera McKennan Hospital is a 545-bed, nonprofit Catholic facility with 5,000 employees. It is part of Avera Health, a regional organization composed of 230 health-care facilities with more than 12,000 employees.
The cuts begin in the Catholic organization’s top echelon, with Avera Regional Vice President Fred Slunecka and other executives taking a 6 percent pay cut. Managers will see a 5 percent reduction in wages; and other employees will see a 4.75 percent reduction. Employees will all lose five days of paid vacation, and raises have been taken out of the picture for the foreseeable future. Physicians were not targeted by the plan at this point.
The cost-saving measures will begin March 8 and remain in effect for as long as necessary.
Krebs emphasized that the cuts are a tactic Avera is imposing upon its employees in order to avoid a more drastic measure — layoffs.
“The decision to not lay off people affects Worthington as much as anywhere else,” he said. “That’s part of the mission-based philosophy of being a Catholic hospital — we’re all in this together. It’s an effort to spread the pain across, instead of having a select few bear all of the brunt.
“And, if you put people out of work,” he added,” that’s not going to help the economy. This way our employees can all keep their paychecks and go to the local grocery story, whether it’s in Sioux Falls or Worthington.”
On behalf of the Avera system, Krebs expressed the hope that all Avera employees would take the cuts in stride and stay focused on their mission to provide the best possible health care to their patients.
“We appreciate the spirit of mission, and we hope that lives on in all of our employees — sacrificing for the long-term good of the hospital and system in general,” he said.
Tags: news, worthington, averamckennan, avera, averaworthingtonspecialtyclinics
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