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Sansum facing financial challenges, furloughs planned

Sansum Medical Clinic
Sansum Clinic is making staffing changes to weather financial challenges from Coronavirus.

SANTA BARBARA, Calif. -- Sansum Clinic, a nonprofit health care group with more than 200 providers at 22 locations in Santa Barbara County, is facing "considerable financial challenges" and has told employees it foresees difficult decisions regarding temporary staffing adjustments.

Employees were notified in a March 23 recorded phone message that Sansum is looking for ways to temporarily reduce costs in response to the fallout from the Coronavirus crisis.

NewsChannel 3 has learned Sansum will announce furloughs Friday affecting 50 percent of their approximately one thousand staff members. Some will have their hours reduced and others will be out of work for a temporary amount of time. They are telling employees they are hoping for an eight-week time frame to get everyone back to work on their normal schedules, but that will depend on how things proceed with the Coronavirus.

"We're sickened by it," said Dr. Kurt Ransohoff, Sansum Medical Director and CEO, of the decision to cut 30 percent of non-doctor payroll. "If we don't do it, we run the risk of a bigger problem."

Doctors and nurse practitioners will not be affected by the furloughs. Their employment status and pay structure are different, and their incomes have generally been reduced because there are fewer patients to see, according to Ransohoff.

In a letter posted to the Sansum Clinic website on March 22 titled "Employee Covid-19 Updates," the company discussed the "difficult decision to cancel many non-essential and elective visits." Sansum said it was offering limited Telehealth appointments.

Ransohoff says Sansum has been absorbing millions of dollars in losses per week for many weeks. The volume of patients has dropped by about 50 percent in March. Following the advice of the CDC and Public Health, Sansum has been canceling or postponing non-elective procedures to reduce the risk of spreading Coronavirus.

"Because we don't have deep pockets to rely upon," Ransohoff said of the staffing reductions, "We have to make these painful, painful choices."

Ransohoff points out that all other nonprofits like Sansum are owned by hospitals.

"They have a deep pocket to rely on during bad weather," the CEO said. "We don't."

Ransohoff says 2019 was one of Sansum's best years financially, but they operate on a 1-2% margin in a good year. They are pursuing Federal and State assistance and reaching out to elected officials for help.

"We're open and will continue to be open," Ransohoff said. "Patients probably won't feel anything."

Employees who are having their hours reduced by more than 50 percent will have the employee portion of their monthly health care premiums paid for by Sansum.

"We need to be sure we are here," Ransohoff said, "when this storm is over."

In its 99th year, Sansum is the oldest and largest nonprofit outpatient health care provider on the Central Coast.

Coronavirus / Health / Santa Barbara- S County

Scott Hennessee

Scott Hennessee is the co-anchor of KCOY 12 Central Coast News evening newscasts and co-anchor of KKFX My Fox 11 news at 10 p.m.