Spooked by the financial fallout of the COVID-19 pandemic, Oregon Health & Science University has formally given itself more power to fire or cut the hours of thousands of faculty members in the event of another emergency or dire money crisis.
OHSU has added language to its faculty contracts that give the institution the right to cut the faculty member’s salary or eliminate the job in the event of a “business reorganization;” a “natural disaster, pandemic” or other emergency; and “financial stringency” as determined by the institution’s president and board of directors.
The new language also lets OHSU impose a furlough or “work closure,” if approved by the president.
Under its previous faculty agreements, OHSU could invoke financial reasons to terminate a faculty member or cut their salary only if a grant, gift or other similar money that supported the work was cut.
However, that didn’t prevent OHSU last year from including faculty in a large group of employees whose pay was reduced by an average of 10% following pandemic-induced revenue declines. OHSU later restored all the salaries.
The new terms are being put into individual faculty work agreements as they come due, OHSU said. Typically, each faculty member’s agreement, called a notice of appointment, lasts a year, but some are shorter and some longer, OHSU said.
OHSU has renewed 3,180 faculty contracts for the fiscal year that starts July 1, said OHSU spokesman Erik Robinson.
Some faculty are not thrilled with the new language.
“It appears that OHSU included the new language into the faculty contract because they took a lot of flak from faculty during the pandemic because of the (salary) cuts and are now making sure they have a legal stance to cut or terminate faculty,” one faculty member told The Lund Report. “It appears faculty has become more dispensable with anticipation of reduced enrollment due to the national negative publicity related to OHSU condoning harassment and discrimination,” the faculty member added.
Another faculty member said ironically that the switch show’s OHSU’s “gratitude to the faculty for the hard work they've done” during the pandemic.
Robinson said OHSU has similar language in its agreements for unionized work groups and non-faculty non-unionized groups. Union contracts also allow for layoffs though OHSU’s contract with the Oregon Nurses Association does not provide for pay cuts as the new faculty contracts do.
“The changes described in the (agreements) provide OHSU additional options to address any extraordinary financial shortfalls that arise from emergent or unforeseen situations such as those we experienced with the global pandemic,” Robinson said. “While these changes strengthen OHSU’s ability to manage through challenging times, we do not anticipate the need to invoke these provisions except in extreme circumstances.”
In its letter to faculty members announcing the changes, OHSU said “financial stringency” is “financial difficulties that are unusual in extent and require extraordinary responses.”
The pandemic pounced on revenue for OHSU and other hospital systems from March to May of 2020, when Gov. Kate Brown banned non-urgent procedures and patients stayed home. As a result, OHSU reported monthly operating losses, a rare thing for the consistently profitable system. To conserve cash, it imposed pay cuts averaging 10% from July through September on about 4,500 faculty and non-unionized executives and managers, then it restored the salaries back to their original level. Earlier this year OHSU paid staff for the amount their salaries had been reduced in 2020.
Through February of the current fiscal year, which ends June 30, OHSU had an operating profit of $41 million operating revenues of $3.7 billion, far better than the $26 million loss it had initially projected for the fiscal year.
The system has projected an operating profit of $37 million, or 1%, for the fiscal year that starts July 1. OHSU executives on June 25 are slated to provide the latest figures for the current fiscal year and a final proposed budget for the coming one.
Lynne Terry contributed to this report.
You can reach Christian Wihtol at [email protected].