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Hospital deferring retirement match

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  • #16
    Originally posted by JBME View Post
    artemis, you can just quit, right? then you'd have access to the whole 600k. either way, yes a very tough situation to be in. WCI writes about the risks of a 457 and he does mention why it's a bad idea and this is one of them. we all understood the risks, presumably. really stinks
    When I started putting money in the 457b, many many moons ago, I didn't fully understand the difference between a governmental and non-governmental one. So I didn't understand the risks. By the time I did, I already had a substantial amount in there. Since my hospital system was very financially stable, I wasn't too worried, so I kept contributing. Bankruptcy secondary to something as unpredictable as a pandemic never crossed my mind. Should the worst happen, losing the 457b won't completely sink my retirement, but with the pounding my taxable account is taking, it would definitely be a blow I'd feel.

    As for quitting, my contract requires i give three month's advance notice. And with everything that is happening right now, I'm not sure I'd feel right about retiring early (even though it would certainly be the safer move for me, from a personal health standpoint as well as considering that 457b). My department is understaffed for the amount of work we usually do (although our case volume has understandably gone down recently). I'd feel guilty abandoning my colleagues. So I will probably stay and stick it out. But it is indeed a tough decision!

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    • #17
      Well you wouldn’t retire early. You would eventually find another job. You just can’t be at your current employer to have access to the 457 money. Either way, best of luck and I hope the hospital system just has a few bad months and doesn’t go under permanently

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      • #18
        If your hospital system was financially stable before this then I would bet they come out on the other side. The hospital systems that don't make it to the other side are probably the ones that weren't going to make it anyway.

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        • #19
          No letter yet but won't be surprised if it happens. Hospitals have thin margins. Ours was doing well but all the revenue walked out the door when we stopped doing elective procedures.

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          • #20
            Our physician organization is deferring employer retirement contributions. Too soon to tell when or whether that will be made up. You need to have money to make payments. Health systems are not only seeing huge drops in revenue but an explosion in costs.

            Hospitals are low margin operations. Any place will face financial strain in this situation. Across the country, there were constant hospital closures before COVID came along. I suspect it will take major governmental investment to avoid a flood of hospital closings.
            My system was in good shape before this started. We will see how it looks as this plays out.

            The CEO is taking a 50% pay cut. The other senior administrators are working overtime and taking big pay cuts as well.

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            • #21
              Originally posted by afan View Post
              Across the country, there were constant hospital closures before COVID came along. I suspect it will take major governmental investment to avoid a flood of hospital closings.
              This will happen. It has to, they are already re-opening some defunct hospitals to add beds. There is no way hospitals will be allowed to close at this time.

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              • #22
                I think people underestimate how bad the normal "good" hospital financial situation is, and overestimate the 'profit' they make each year.

                Add no elective surgeries and volumes down 95+% and like any other business, amazing or otherwise, its not a survivable situation. This should be a legitamate concern for most every system. Some will last longer than others, but they cant all last for too long.

                Agree there will have to be a bailout type thing, it just makes sense. This isnt from poor business practices per se, they are forced closed and tackling the underlying problem starter at the same time. Which decreased revenue and is costly with low pay at same time. Lose lose.

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                • #23
                  Just a note. Bankruptcy comes in many flavors. Your hospital or healthcare organization may never close its doors. Assets are transferred to “new ownership”. You may come to work and be offered a new job. Same building and same “boss”.
                  Just a new EIN. Any retirement accounts or paychecks due follow a different path. Most likely the hospital will not close. The details on the liabilities are sorted out later by the bankruptcy court. Happened to many banks in an orderly fashion. Not so sure because there is no FDIC with authority to take over and declare insolvency and sell the assets. The point is, the liabilities get eliminated, not necessarily the hospital itself. It gets renamed. Carryon.

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                  • #24
                    private equity leading the charge.....
                    https://www.propublica.org/article/c...urses-benefits

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                    • #25
                      Originally posted by artemis View Post

                      Alas, I have about 600k in that thing, so losing it would really, REALLY hurt. That's about half of my dedicated retirement money. But when thinking about the events that could cause a hospital to founder, I bet a pandemic wasn't on anyone's radar. It certainly wasn't on mine!

                      What's done is done, though. Until I retire, there's no way to get that money out. So I'll just have to live with any losses that may end up happening.
                      This is just my opinion but I feel that few hospitals would close due to this because of the stimulus money. Some are going to do better then others and those that were borderline might close but if you work for a financially responsible system that serves it's community well I bet your employment and 457 are safe.

                      At lease that is what I keep telling myself...

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                      • #26
                        Originally posted by Zaphod View Post
                        This isnt from poor business practices per se...
                        The irony is that in the case of my own hospital system it IS from "poor business practices" (which just happen to be good medicine). Omaha hasn't seen a wave of COVID-19 cases, and knock on wood we may not, because people are actually obeying the "social distancing/stay at home" rules. But all the hospital systems in the city have voluntarily agreed to stop elective surgeries in order to conserve PPE and open up beds, as a necessary precaution in case that wave of COVID-19 patients does arrive; my own hospital has two floors with wings that have been turned into dedicated COVID-19 wards, with only two of those beds currently occupied. Deliberately keeping hospital beds empty is very bad business! But right now we need to do it.

                        (I'm particularly impressed by the private orthopedic hospital and spine surgery hospital in Omaha, who are fully on board wit this. No elective hip or knee replacements, no elective dicsectomies - the physician groups who own those institutions have got to be hurting! But they know there is a non-zero chance we'll need that PPE and those inpatient beds for COVID-19 patients, so they are sacrificing their own profits for the sake of the local community. Doctors and businessmen, who have decided that in a health emergency it's their doctor hat which matters the most.)

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                        • #27
                          I agree that states will take extraordinary measures to prevent hospitals from closing during the crisis. Likely backed up by federal money. But once the immediate threat is over, we will have the same hospitals operating on thin margins, now saddled with huge debt and months of lost revenue. Many were barely afloat before this happened.

                          The way our health care system works, there is heavy pressure to cut costs. That is why hospitals don't carry long term stores of supplies, equipment and medications.
                          That is why we have relatively fewer hospital beds than many developed countries. And fewer ICU beds. Before this emergency, any hospital that tried to prepare for this would have been forced to stop. Given the cost of our system, it is hard to imagine states and the feds letting health systems develop more redundancies.

                          We might see federal support for domestic manufacture of many of our necessary hospital equipment and supplies. We might see less restrictive CON processes blocking hospital expansion. We might see mandates that the orthopedic and cardiac surgery hospitals function as general hospitals or be forced out of business. The latter would probably reduce costs for the nation as a whole.

                          But increase hospital capacity and store houses to the tune of hundreds of billions per year? Not going to happen.

                          Long term, more hospital closures seem inevitable.

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                          • #28
                            Originally posted by artemis View Post

                            The irony is that in the case of my own hospital system it IS from "poor business practices" (which just happen to be good medicine). Omaha hasn't seen a wave of COVID-19 cases, and knock on wood we may not, because people are actually obeying the "social distancing/stay at home" rules. But all the hospital systems in the city have voluntarily agreed to stop elective surgeries in order to conserve PPE and open up beds, as a necessary precaution in case that wave of COVID-19 patients does arrive; my own hospital has two floors with wings that have been turned into dedicated COVID-19 wards, with only two of those beds currently occupied. Deliberately keeping hospital beds empty is very bad business! But right now we need to do it.

                            (I'm particularly impressed by the private orthopedic hospital and spine surgery hospital in Omaha, who are fully on board wit this. No elective hip or knee replacements, no elective dicsectomies - the physician groups who own those institutions have got to be hurting! But they know there is a non-zero chance we'll need that PPE and those inpatient beds for COVID-19 patients, so they are sacrificing their own profits for the sake of the local community. Doctors and businessmen, who have decided that in a health emergency it's their doctor hat which matters the most.)
                            Right, but this is basically a top down forced thing, correct action or not.

                            In KY, the government mandated it, as have position statements by CDC, and every large association with power, thats not a business practice.

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