By mid-November, MultiCare managers will have decided how many buyouts to accept and if layoffs will still be necessary. By mid-December, employees whose buyouts were accepted will have left their jobs.
These recent buyouts represent just the first phase of MultiCare’s three-year, $300 million reduction plan. The plan was implemented to help MultiCare succeed in the rapidly changing market, which increasingly demands healthcare be less expensive, according to the report.
MultiCare CEO Bill Robertson, who assumed his current position this spring, claims it is necessary for providers to adjust to lower payment rates from Medicare, Medicaid, private insurers and patients themselves, according to the report.
As MultiCare improves efficiency to adjust to lower payments, eliminating jobs represents just one way the system will reduce costs. According to Mr. Robertson, the first year of cost-cutting will focus on “overhead type activity” and will reduce expenses by $100 million. Eventually, however, medical professionals will begin feeling the squeeze as well.
MultiCare employees have expressed frustration with the cuts saying the elimination of support positions increases the demands on nurses and physicians which will ultimately impact patient care, according to the report.
Much of the frustration also stems from MultiCare’s profitability. In 2012, the system recorded its highest profits ever of $207 million, more than three times its profit of $63.5 million from the year before. In recent years, MultiCare has also spent hundreds of millions on construction and improvement projects.
Despite record profits, labor unions representing nurses and other medical workers will face cost-cutting as contracts are negotiated going forward.
MultiCare operates five hospitals, 26 primary care clinics and 10 urgent care centers.
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