Financially troubled Centegra to lay off 131 employees, outsource 230 jobs

Crystal Lake, Ill.-based Centegra Health System plans to lay off 131 employees and outsource another 230 jobs following a year of significant financial losses.

Centegra said the layoffs will affect support and administrative workers. Those employees will receive full pay and benefits for 60 days, Centegra spokeswoman Michelle Green told the Chicago Tribune.

The health system will outsource 230 jobs to Alpharetta, Ga.-based nThrive, which currently runs Centegra's health information department and business office. Workers in the outsourced positions will be offered jobs with nThrive in their current locations, according to the Chicago Tribune.

Centegra announced the layoffs and outsourcing after reporting an operating loss of $62.3 million for the fiscal year ended June 30. That's compared to the $4.3 million operating surplus the system recorded in the year prior. Centegra said the losses were largely attributable to the costs of opening its hospital in Huntley, Ill., a rise in uncompensated care costs and treating more Medicare and Medicaid patients.

The system hopes the workforce reduction will help turn around its finances.

"The difficult decision to balance our workforce through a reduction will ensure our health system is financially viable for years to come," Centegra CEO Michael Eesley wrote in a memo to employees Tuesday. "While this day marks a major step toward financial improvements, it brings change for people in a number of positions."

In addition to the job cuts, Centegra has taken other steps to reduce costs. The system suspended acute inpatient care Aug. 12 at its 108-bed hospital in Woodstock, Ill., and filed a notice with the state to make that change permanent. That move is projected to save the system $15 million annually, according to the Northwest Herald.

The system is still working to finalize a partnership agreement with Chicago-based Northwestern Medicine. The deal is expected to close in 2018, according to the Chicago Tribune.

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