Just two months after Howard Brown Health (HBH) leadership and non-nurse employees represented by the Illinois Nurses Association (INA) finalized a three-year union contract, the nonprofit has announced that about 100 employees (15 percent) will be laid off in the coming year to address the organization's $12 million shortfalls. The INA covers almost all HBH employees under a singular HBH Workers United banner.
Founded in 1974, HBH is a Federally Qualified Health Center as well as the Midwest's largest LGBTQ+ affirming healthcare provider, serving over 30,000 patients with primary, dental and pediatric care as well as counseling and HIV case management, testing and outreach at 12 clinics across Chicago. HBH also includes Broadway Youth Center and the Brown Elephant resale shops under its umbrella.
Behavioral health, health education, PrEP navigation, COVID testing and other non-medical team members are among the staffers who will be affected by these layoffs.
In a press release on the organization's website announcing the three year union contract, HBH stated, "A skilled, professional and supportive nursing department is core to our commitment to patients and community … Howard Brown is grateful to its labor relations team and the dedicated team of nurses who represented their colleagues at the bargaining table. Achieving this milestone in a collegial and efficient manner is a success for both sides."
During bargaining session meetings between HBH leadership and HBH Workers United members twice in November, leadership proposed a voluntary separation agreement. In a subsequent email to affected workers, leadership said they would receive one week's payment for each year of service with the minimum equaling two weeks and maximum equaling eight weeks of severance pay. Laid off workers would also receive healthcare benefits, including the Employee Assistance Program, through the end of Jan. 2023 and no challenge to any unemployment claims that are filed. HBH Workers United rejected this offer. With the union's rejection, HBH leaders have offered these terms to 36 non-union employees with a Dec. 5 response deadline. So far, 10 have accepted this offer.
HBH Workers United members held a rally to protest these layoffs Dec. 3 outside HBH's administrative building at 1025 W. Sunnyside Ave. According to HBH Union lead organizer Margo Gislain, about 250 people gathered that evening for the rally bundled up against the cold temperatures and then marched to HBH President and CEO David Ernesto Munar's home with a list of demands.
These demands included no layoffs, a fair contract and access to all of HBH's financial statements. They are also calling for HBH to hire more people to accommodate the high number of patients since most locations are currently understaffed.
Among the elected officials at the rally and march were Alds. Byron Sigcho-Lopez (25th Ward) and Rossana Rodriguez-Sanchez (33rd Ward).
"It is inconceivable that an institution rooted in LGBTQ and liberation like Howard Brown Health would lay off health care workers when they're needed most," said Sigcho-Lopez in an email statement to Windy City Times on Dec. 5. "When we see the tragedies happening in our community every day, this is a matter of life and death. Denying mental health services to the trans community, to members of the LGBTQ+ community is an atrocity. We cannot allow a single layoff, especially when the city of Chicago just approved the largest budget in the history of our cityfour times the budget in 2002yet we are cutting off services that are vital to prevent even more suicides and mental health issues in our community."
"The fight of Howard Brown Workers against layoffs is the fight for structures of care for everyone," said Rodriguez-Sanchez in an email statement to Windy City Times on Dec. 5. "It is the fight to ensure that our queer community has access to quality health care at a time when we are being dehumanized. It is the fight to ensure that our care is not interrupted. It is the fight to ensure that our health care workers are cared for and treated with dignity. Howard Brown workers are fighting for all of us and we all need to stand in solidarity with them and support their fight."
According to a HBH financial statement 990 tax filing form ending in June 2021 that ProPublica obtained, the organization had a $30 million surplus. The report also showed that Munar's salary was more than $300,000/year, which included a board approved increased compensation rate. Nine other people in HBH leadership make over $200,000/year. This is in addition to the still-under-construction $19.5 million 71,000 square foot, multi-story clinic on North Halsted Street.
HBH Workers United members have raised questions about the $12 million shortfall in light of this publicly available financial statement, as well as why leadership has only taken a six percent pay cut.
In an interview with Munar following the rally and march, he stated that "I cannot change my pay, only the board can do that. What I can do is change the pay for the rest of the leadership, which I did. I also did not fill the three leadership positions that are currently vacant which is saving the organization about $600,000/year. I also did not want to reduce the other leaders' salaries to the point where they would quit. This would further harm the organization's future."
Additionally, Munar said "the 340B pharmacy program has been our number one revenue source. It is a federally negotiated bulk purchasing program for prescription medications and we extend that savings 100 percent to our uninsured patients … where they get 30-70 percent off retail price."
Munar added that the inventory that is dispensed to insured patients generates a savings that HBH puts back into healthcare to help pay for uncompensated care, dental care, behavioral health, public health and support services. He said that recently organizations like HBH have been "under attack by big pharma" where they want to "reduce the amount of money Howard Brown can keep" to help with their operating costs.
Munar added that the 340B program has always been volatile and they have taken that into consideration but the recent, severe changes have been quicker than expected. This is where the revenue shortfalls have emerged over the past year, according to Munar. He said this past June 30 was the first time in ten years that HBH has had a deficit which amounted to a $2.8 million operating loss.
"We were expecting to earn $20 million more in fiscal '22 through the pharmacy program than we did," said Munar. "We had COVID dollars in the mix that have since expired. We were able to mitigate the impact in fiscal '22 to just under $3 million. At the start of this fiscal year, under the direction of the board, we identified about $5 million in back-office, non-programmatic personnel reductions as a part of a plan to get through this current fiscal year without a deficit. The scale of changes that actually ramped up much higher and faster than we had previously anticipated means we are facing a $12 million structural deficit for this fiscal year."
Munar told Windy City Times that the board has directed him to identify ways to make up for this revenue loss. He said that some of the $30 million surplus from last year went to cover the raises employees received due to inflation, subsidizing behavioral health and youth development programs, social services, building projects, reserves and investments.
In terms of the new building on Halsted Street, Munar said that this has been ongoing for five years and that stopping construction right now will make the deficit grow, not shrink. He added that "opening the building will actually help us" financially because more patients will be able to be seen. Munar added that the new building is being funded as a capital expense with reserve funding to purchase the land and then using grants, philanthropy and lending to cover the construction costs.
Munar said that his goal with these layoffs was mitigating them as much as possible. HBH is doing that by identifying cost reductions in other areas that make up about 75 percent of the $12 million revenue shortfalls, which leaves 25 percent that has to come from laying off personnel.
He also said HBH looked at management positions to be cut first before any front-line staff. Then they offered the voluntary separation package to the union, which Munar said they declined during bargaining on Dec. 5. Munar added that due to the union's declination, layoffs are their only option and this will affect 60 HBH employees that are a part of the HBH Workers United union. He said that HBH has successfully operated with fewer employees before. In 2019, HBH employed 200 less people than they do today. The increased staffing since then was due to COVID and the need for more people to do that work.
According to Munar, the union was provided with about 400 pages of documentation for fiscal '22 that is still in draft audit status and financial statements for the four months of this fiscal year.
"The union asked for three years of bank statements and on the advice of counsel we showed them beginning and ending balances," said Munar. "The details did not seem necessary to share with them. We are open to un-redacting them but we need a pledge of confidentiality because these are bank statements. We want the union to understand the financial position that we are in. We did not run a counter-campaign when our employees were organizing for this union. We took a position that this was their decision. It is unfortunate that the timing is such that as we are starting to bargain with them we have to advance this very difficult news.
"There are still 400 employees that are union members and we want to continue to have a strong operation and business so that we can meet our obligations to the patients and employees. This is a reset to make sure the organization can be fiscally strong and continue to grow. The new building is a way to do all of thismeet our mission, serve our patients and by virtue, support our employees."
Munar added that, "Leadership is committed to keeping employees informed of the facts and has held briefings and shared information about the financial challenges and to answer questions. In the meantime, we are committed to continuing to negotiation with the union in good faith."
"The layoffs that Howard Brown Health is proposing would devastate our InPower, PrEP Navigation, Behavioral Health and Trans Healthcare teams," said HBH TGNC Youth Hormone Coordinator Rose Sawyer in an email statement to Windy City Times. "Although my role in trans healthcare is not currently being threatened in the proposed layoffs, I know that our ability to provide affirming care for our patients would be irreparably harmed by the loss of the other roles that are currently being threatened with termination. Teams across Howard Brown are already critically understaffed with existing staff being overworked. Turnover and burnout have been high at Howard Brown for years due to inadequate staffing and incompetent management. When asked by the bargaining committee what their plan was to keep programs running with such deep and devastating cuts, our executives told us that 'There was no plan.' It is safe to assume, based on the history of this organization, that the staff who are not laid off will be expected to work the jobs of those who are on top of their existing job duties. This will once again increase burnout and turnover and further burden staff that are already overworked.
"The result of these actions will undoubtedly be a serious drop in the standard of care for our patients. The programs that are at risk of being hardest hit by layoffs provide critical care for our patients, often the most vulnerable patients that use Howard Brown for care. To undertake layoffs right after Howard Brown's workers won our union election and at our first bargaining session is despicable and reeks of union busting behavior.
"Even after repeated requests for information management has failed to produce the financial documents necessary to demonstrate that there is a need for layoffs. The stance of the Bargaining Committee is that these layoffs are punitive and that they will harm both our workers and our community. We stand fully against layoffs and intend to take whatever action is necessary to halt them.
"If management is telling the truth about the budget shortfalls, they need to open the books immediately and prove it and then work with the union to find other ways to cut costs," said Gislain in a phone interview with Windy City Times. "People's lives and livelihoods matter more than construction sites. Management needs to put their workers over profits."