Lower Medicaid revenue and policy uncertainty prompts hiring freeze, delayed construction at Samaritan Health in Oregon

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Corvallis, Ore.-based Samaritan Health Services instated a hiring freeze and will cut back on capital spending in an effort to address decreased Medicaid revenues, Albany Democrat-Herald reports.

Samaritan CEO Larry Mullins sent an email to employees Monday notifying them of measures the hospital will take to protect its bottom line, while avoiding layoffs to its more than 5,500 employees. In addition to a hiring freeze for noncritical positions and delaying construction projects, Mr. Mullins said the hospital will sharply decrease travel and conference budgets, according to the report.

A primary reason for the cost-saving measures is a large decrease in revenue from patients covered by Medicaid, Mr. Mullins wrote in the email, obtained by Albany Democrat-Herald. Oregon allocates funds to Samaritan based on the number of Medicaid beneficiaries it treats. The reduction in Medicaid patients – which the Corvallis Gazette-Times reports was between 6,000 and 8,000 beneficiaries so far this year – led to net losses in the first two months of 2017.

Mr. Mullins also said despite Republicans' decision to pull the American Health Care Act last week, he expects future reductions to Oregon's Medicaid program at the federal and state levels. 

Mr. Mullins added Samaritan will move forward with the cost-cutting measures "to prepare and position ourselves to be able to continue our primary mission of healthcare delivery with the least harm to our workforce and community," according to Albany Democrat-Herald.  

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