Howard Brown Health Announces Cost-Saving Measures to Address FY23 Revenue Shortfall
Workforce Reduction Part of Action Plan to Strengthen Financial Position of Midwest’s Largest LGBTQ+ Health Center
(Chicago, IL, January 2, 2023) – Howard Brown Health announced agency-wide actions, including a reduction in workforce, as part of an action plan to close a fiscal year $12 million revenue shortfall created by recent, severe losses in federal program funding. The plan will also help Howard Brown operate the nonprofit agency more effectively and reduce annual costs without cutting patient services.
After good faith bargaining with the union, Howard Brown reduced its workforce by approximately 16% effective Jan. 3, 2023. Through 2022, Howard Brown employed more than 720 people in its 11 clinics throughout Chicago. The reduction includes 60 union-represented positions and 4 non-union staff roles; Fifteen non-union employees already accepted buyout packages as part of the expense reduction plan; and the agency closed 38 union and non-union vacancies. On Dec. 21, 2022, Howard Brown union representatives received the agency’s last, best and final offer, which included a list of employees whose positions would be eliminated.
Separating employees were officially alerted at the end of the day on Friday, and the agency posted an update on its labor relations page sharing the reduction with an official severance date of Jan. 3. Howard Brown is assisting outgoing staff members during their transition to future career endeavors. Departing employees will receive severance pay, health insurance coverage through January, employee assistance program access through January and career search resources.
Howard Brown will also implement non-personnel cost savings and pursue revenue-generating opportunities, which address 75% of the shortfall for fiscal year 2023. Actions include eliminating or reducing spending, implementing leadership pay cuts, and establishing efficiencies in care delivery.
“After looking at every option for cost-saving measures, many which we have already started to implement, we are now taking difficult but necessary actions to reduce expenses with a reduction in workforce. The goal is to minimize the impact on our employees and maintain the high-quality services that our patients expect and deserve,” said David Ernesto Munar, president and CEO of Howard Brown. “While painful in the short-term, these cost-saving measures will help ensure Howard Brown’s ability to serve our communities for decades to come.”
The revenue shortfall stems from drastically reduced revenue due to changes in the 340B federally negotiated pharmaceutical discount and reimbursement program and the end of federal COVID-19 relief funding. Across the United States, LGBTQ+ health care organizations like Howard Brown are facing similar challenges over external pressures on operational finances.
The Midwest’s largest LGBTQ+ health care clinic will continue to provide health care services and programs to all patients, regardless of their health insurance coverage status and ability to pay. Part of the plan to stabilize Howard Brown’s budget includes adopting measures aligned with best practices for patient-centered health care.
“Our patients and their care remain our top priority,” Munar said. “Through this process we are identifying new, more efficient ways to improve services. From allowing patients to schedule visits through MyChart to refocusing on our core strengths in primary care, we will ensure that patients from all backgrounds and abilities to pay can continue to rely on us for lifesaving, affirming health care.”
Howard Brown Health is a federally qualified health center serving more than 40,000 adults and youth at 11 clinics on the North, South, and Northwest Sides of Chicago. Howard Brown offers a range of key services including primary medical care, HIV/STI prevention and youth services.
Howard Brown has regularly provided labor relations updates on its website and has previously posted the following related public statements:
Wren O’Kelley, Associate Director of Communications and Marketing