FAQ: COVID-19 Financial Impact

Our financial recovery plan has two tracks:

First is the careful restoration of portions of our clinical practice at the Medical Center so that we can take care of those patients who will suffer harm if deferred longer and we can generate some additional revenue. We are working on a proposal to the State DOH and Monroe County on how this could be done safely.

The second element of our plan is cost reduction. Even if we begin to recapture more of our normal revenues in the next couple of months, we can’t erase the financial gap that’s been created. As was outlined in a messages to all staff and faculty on April 15,  April 28, and June 4, cost reduction activities include a hiring freeze, eliminating the annual Wage and Salary increase, reducing retirement contributions, delaying the wage compression adjustment, and cutting capital spending.

Additionally, we will undergo a temporary furlough program for employees that started in May. The type and duration of these furloughs will vary. We hope to conclude the furlough period by the end of August, but unfortunately, our ability to predict the duration of these furloughs is limited because of the continued uncertain course of the disease, and the state and county mandates to reopen our economy more fully.

We have received some assistance from the recently enacted CARES Act. While helpful, it is woefully inadequate to compensate for our mounting losses. Our University health system received $33M (including affiliates), which is not enough to offset even a single week of the current lost revenue for the Medical Center. We’ve also received about $199 million in loans from the Centers for Medicare and Medicaid Services that must be paid back starting in August. While we continue to work with our Congressional delegation and professional associations to vigorously advocate for relief funds, clearly the monies we receive will not fix the significant financial gap we are facing.

University endowments are not designed to represent a “rainy day fund” to cover sudden and unpredictable revenue losses. The University’s endowment is carefully managed as required by New York State law and overseen by our Board of Trustees to ensure support for current students, faculty and staff as well as future generations for many years. In addition, there are legal restrictions on the use of these funds for specific purposes. Lastly, it is not prudent to withdraw funds beyond budget when the endowment value has been reduced as we have seen over the past several weeks.