Banner Health, which has recently announced the elimination of some leadership positions and multiple rounds of layoffs, hopes to save $65 million through a voluntary employee termination program, Becker’s Hospital Review reported.
Banner Health, which employs more than 850 providers at 59 clinics in Arizona, had announced in February that it would restructure operations, the Phoenix Business Journal reported.
- Uncertainty surrounding the future of healthcare policy factored into the decision by Banner Health to layoff employees, the Greeley Tribune reported.
Banner Health is not the first health system to target labor costs in an effort to rein in spending. Operating losses at MD Anderson Cancer Center and Catholic Health Initiatives led both of those health systems to announce layoffs in the past year.
Healthcare reform that started with the Affordable Care Act (ACA) has encouraged health systems like Banner to reimagine delivery systems to accommodate new reimbursement models. While restructuring efforts have the potential to improve health outcomes and drive down spending, many health systems have seen operating incomes drop in recent years.
The Cleveland Clinic recently saw its operating income drop by 71% and CEO Toby Cosgrove said recently that more than one-half of health systems are in a similar scenario. Changes to reimbursement models have been accompanied by new regulations and administrative burdens that health systems were not financially prepared for, he said.
Healthcare reform debate was renewed when Republicans took control of Congress and the White House in January. However, this has created even more uncertainty for health systems, which were just getting accustomed to the ACA and other changes introduced by legislation like HITECH Act and MACRA. Ongoing healthcare reform debate has encouraged some health systems to pull the plug on capital projects and to hold off on new hires.
The first attempt at healthcare reform by Congressional Republicans and President Donald Trump has stalled. However, lawmakers can still revisit the matter. Until lawmakers provide a clear indication about the path forward for healthcare policy, it seems health systems may have to get used to some uncertainty.