Confluence Health announces pay cuts in wake of pandemic

WENATCHEE — Confluence Health’s chief executive officer, Peter Rutherford, took a 25 percent temporary reduction in pay, effective March 23 — one of a series of temporary cuts for the organization’s senior management and physicians. The cuts come in response to financial challenges resulting from the COVID-19 outbreak.

Communications director Andrew Canning said Confluence officials do not anticipate making other pay cuts.

The organization’s executive leadership took a 10 percent pay cut on March 23. Other administrative pay cuts went into effect April 15. The Confluence senior leadership team took a 7.5 percent pay cut, directors a 5 percent pay cut, and managers a 3 percent pay cut. The cut for medical professionals on production-based salaries is 7 to 10 percent.

In a production-based model, medical professionals are paid based on their output, such as the number of patients they are treating, among other measures.

Canning said the cuts would affect about 60 Confluence employees in Grant County. Throughout all of Confluence’s service area, the cuts will affect nine people on the executive leadership level, 20 people on the senior leadership level, 51 directors, 117 managers and 420 salaried and production-based medical professionals.

In a press release announcing the cuts, Rutherford said, “We have seen a significant increase to expenses as we’ve made critical investments to expand community testing and realign our facilities and care teams to treat COVID-19 patients. Like other health care organizations, we operate with a low margin. Without changes, we will experience $26 million in operating losses. We are committing $20 million of reserves to help cover losses.”

On March 19, Gov. Jay Inslee ordered all Washington medical facilities to postpone elective surgical procedures. Medical facilities also have placed significant restrictions on patient visits in response to the outbreak.

“Confluence Health and Wenatchee Valley Medical Group (Confluence physicians) employ roughly 4,200 individuals so temporary pay reductions at the leadership-provider level add up rather quickly,” Canning wrote. “In total, these temporary reductions will impact nearly 600 individuals or roughly 15 percent of our workforce.”

Confluence Health operates Central Washington Hospital and Wenatchee Valley Hospital, both in Wenatchee, and clinics throughout Grant, Chelan, Douglas and Okanogan counties. Its clinic locations include Moses Lake, Ephrata and Royal City.

Cheryl Schweizer can be reached via email at education@columbiabasinherald.com.