Atrium Health cuts labor costs, affecting 90 positions: 11 things to know

Charlotte, N.C.-based Atrium Health, formerly Carolinas HealthCare System, is cutting labor and nonlabor costs as part of systemwide efforts to improve efficiency.

Here are 11 things to know.

1. In a statement to Becker's Hospital Review, the $9.7 billion health system said it began cutting labor costs in November 2017 "to address areas that can operate more efficiently."

2. The cuts so far have affected 90 employees — eight in clinical roles and 82 in nonclinical roles, according to the system. That represents 0.24 percent of Atrium Health's nearly 38,000 Charlotte region employees.

3. Affected employees include workers from the system's cabling department. Officials attributed that particular efficiency move to the fact the service has declined, as well as a less prevalent demand for low voltage cabling installation and support.

4. Some of the total 90 affected employees had their hours cut, while others may face overtime restrictions.

5. Overall, Atrium Health reported a 2017 turnover rate of 13.8 percent, or more than 6,000 employees.

6. The healthcare system plans to continue to address efficiency opportunities in the future. Officials said the goal is to do a majority of future cuts through attrition and streamlining vacant positions. It did not provide specifics as far as how many more employees could be affected.

7. The system is also working to improve efficiency through nonlabor savings such as supplies and group purchasing, process enhancement and product uniformity.

8. Atrium Health spokesperson Chris Berger told Becker's the system's current goal is to operate at a 50 percentile efficiency rate compared to benchmarked systems of similar size.

9. The system said: "While we don't have a set timeline to improve to a lower percentile, we know to provide more affordable care to our patients and communities, we must continually find ways to improve our efficiency percentile."

10. As Atrium Health cuts labor costs, it is also hiring for various positions. The system reports it hired more than 20,000 new employees, including nearly 5,000 nurses, from 2015 to 2017. Moving forward, the system has budgeted for an increase of 600 employees this year compared to 2017. Atrium Health currently has more than 2,000 open positions.

11. Mr. Berger says Atrium Health will also continue to look for both labor and nonlabor efficiency savings, independent of its proposed merger with Chapel Hill, N.C.-based UNC Health Care and proposed addition of Macon, Ga.-based Navicent Health.


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