Sansum Furloughs Hundreds of Employees

COVID-19 Crisis Costs Santa Barbara Clinic Millions

Credit: Paul Wellman

Sansum Clinics CEO Kurt Ransohoff announced that hundreds of Sansum clinic employees have been placed on temporary furlough in response to unsustainable losses running into the millions of dollars caused by the COVID-19 crisis. None of the employees, Ransohoff stressed, are being laid off; all will retain their health insurance during the furlough. And for those experiencing financial hardship, Ransohoff added, Sansum will help defray the burden of employee contributions.

In response to the pandemic, Ransohoff stated, Sansum canceled many nonessential surgeries and other elective procedures. Many patients, he added, did not wait to be told and either canceled or rescheduled these visits. This move, he said, cost the clinic “hundreds of thousands of dollars a day.” 

Ransohoff estimated the furloughs would affect one half of Sansum’s employee base, not counting the physicians. Translated, those employees will either be furloughed outright or experience a 20 percent cut in pay. Physicians are not included in this action, though many will experience a significant loss of income, as well, due to reduced demand for their services. Sansum currently employs roughly 2,000 workers. 

“We need to cut our expenses ’til things return to normal,” Ransohoff stated. When that might be remains anyone’s guess, but the furlough is effective for eight weeks. Ransohoff said the action should cut Sansum’s payroll by a third. He and other members of the clinic’s executive leadership will take a pay cut, as well. 

The departments most affected are those dependent on elective surgery, such facial and plastic surgery. Radiation, oncology, and obstetrics will be less impacted. Ransohoff said he’s never experienced anything like this in his 30 years with Sansum. 

“This is huge,” he stated. “We just have no idea how long this thing is going to continue. If it were six weeks, maybe we wouldn’t have had to do this. But by staying open as long as we have — trying to provide services to the community — we wound up losing several million dollars.”

Ransohoff said the losses started to show up in February, but really achieved critical mass after Governor Gavin Newsom declared a state of emergency. Management staff was notified of the furloughs late last night via video conferencing. 

“This is the sort of conversation you want to have face to face,” he said, “but because of the virus, we had to do it this way.” Affected employees got notified today. 

To the extent some of the furloughed workers could be picked up by Cottage to help staff the surge in anticipated cases, Ransohoff said Sansum and Cottage have been in discussion. He expressed hope that any government relief package designed to address the economic violence wrought by the virus would help defray some of Sansum’s losses and restore economic stability to an entity that currently treats about 130,000 patients a year out of 20 clinics.

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