Dive Brief:
- More than 1,000 employees in Tenet Healthcare’s revenue cycle subsidiary Conifer Health Solutions will lose their jobs later this year, according to a Worker Adjustment and Retraining Notification filed in Texas.
- Tenet will lay off 1,037 primarily remote employees by Nov. 2. The layoffs are “expected to be permanent,” Conifer’s director of human resources said in the WARN notice.
- The layoffs are partly attributable to CommonSpirit’s decision in February to end its service contract with the company and exit its stake in Conifer, according to the notice. CommonSpirit’s service contract will expire Oct. 30.
Dive Insight:
Tenet, which founded Conifer in 2008, moved to regain full ownership of the revenue cycle company in February after CommonSpirit decided to insource its revenue cycle functions.
CommonSpirit, which has been a customer of Conifer’s since 2012, said it would pay Dallas-based Tenet almost $1.9 billion over three years to get out of its service contract that was expected to run through 2032. CommonSpirit would also get $540 million from exiting its almost 24% stake in Conifer.
Leaders at Tenet said the transaction was mutually beneficial and would create almost $2.7 billion in total value for the system. Tenet also pledged to invest in automation and artificial intelligence-backed capabilities at Conifer. The revenue cycle company is a major player in the billings space and has over 600 clients.
In a February call with investors to discuss the deal, Tenet CEO Dr. Saum Sutaria said AI and offshoring would create opportunities to lower costs in Conifer.
Now, Conifer is cutting roles.
In the WARN notice, Wheeler said all affected employees have been notified, and that none will be able to “bump” or replace more junior colleagues. She also noted there is no union representing those employees.
Conifer Health Solutions did not respond to request for comment.
