UW Medicine Forecasting Losses Of $500 Million By Summer's End

SEATTLE, WA – University of Washington Medicine expects to be hit with more than $500 million in losses by summer’s end due to its response to the coronavirus pandemic. As a result, the university healthcare system will be required to take drastic steps, including salary cuts and work furloughs, to deal with the financial losses, UW Medicine officials announced Monday.

Dr. Paul Ramsey, CEO of UW Medicine, announced that the medical group’s financial projections are based on substantial lost clinical revenue since the start of the pandemic due to the cancellation of non-emergency and elective procedures as well as the high cost of treating COVID-19 patients, including diagnostic testing and the high use of personal protection equipment needed to treat coronavirus patients.

Ramsey said in a news release that the measures UW Medicine will be forced to take is still being determined but will include the reduction the salaries of senior leaders, staff furloughs and tight controls on spending. The cost-costing measures will extend across the entire UW Medicine organization, including its three hospitals, medical clinics, private practices, airlift Northwest and the UW School of Medicine.

The news release said that Valley Medical Center has already taken several steps to cut spending, including staff furloughs and staffing changes due to low census while additional measures are still being considered.

“UW Medicine has been at the forefront of the national response to COVID-19 in treating critically ill patients, protecting the health of our workforce and limiting the spread of the disease in our community,” Ramsey said in the news release. “I could not be more proud of our employees and their dedication to our mission of improving health for all people.”

“I sincerely regret that our path to financial stability includes reductions in compensation, but I believe the actions we are taking will support the excellence of the UW Medicine clinical, research, and educational programs. As we develop and implement these measures, we are committed to transparency and will seek input on how we can best support our employees during this challenging time.”

As it continues to deal with what officials characterize as “serious financial challenges”, town hall meetings with UW Medicine staff and faculty will be held to discuss recovery plans.