Boulder Community Health is instituting cost-reduction measures that enable the independent non-profit health system to respond to financial pressures caused by the COVID-19 pandemic.

BCH has announced to employees a detailed plan that uses a mix of temporary cost-cutting measures to reduce the organization’s expenses by $3 million per month from August through the end of the year. The plan requires all employees to share in some financial sacrifice. This plan will go into effect July 19.

Like other health care organizations around the country, BCH is facing severe financial consequences from COVID-19. The health system had a steep drop in revenues caused by having to temporarily suspend all non-urgent outpatient visits and elective surgical procedures while also needing to purchase PPE, testing supplies and other equipment needed to care for pandemic patients.

“We are taking action now so we can continue to provide our community with the high quality, personalized care they expect and deserve,” said BCH President/CEO Dr. Robert Vissers. “We need to take significant actions to lower our costs and create a financial structure that is economically sustainable while preserving our most valuable resource – our employees – as much as possible.”

Over the last three months, patient care areas at BCH have had to furlough or reduce hours for some employees due to the decline in patients. The organization is now instituting a temporary 10% pay reduction or reduction in hours for most other employees for the next six months. Other elements of the cost-reduction plan include mandatory vacation days and canceling market pay adjustments and a contribution to the employee retirement plan.

This temporary 10% pay reduction equals a 5% cut in annual pay for most employees. However, Dr. Vissers noted, the multiple elements of this plan have been consciously designed to have a greater impact on BCH leadership. Vice presidents and the CEO will take a 20% reduction in compensation.

“We often talk of BCH as being a family. Family members strive to help each other in tough times,” Dr. Vissers said. “Each BCH employee is making a personal sacrifice that supports our co-workers across the organization.”

The temporary cost-reduction measures will end in January, 2021. At that point, pay rates and work hours will return to current levels.

“I’m confident that these important cost-cutting actions, along with other initiatives in development, will enable BCH to attain the consistently strong financial results needed to maintain our independence,” Dr. Vissers said.