Centegra turns to layoffs, outsourcing jobs to stop financial bleeding – Health Care News

on Sep20

19 September 2017 | 8:30 pm

Centegra Health System is laying off 131 employees and outsourcing 230 jobs as the far northwest suburban hospital network hustles to turn around steep financial losses.

The shake-up involves expanding a relationship with a company that specializes in collecting bill payments from patients, addressing a key issue for why Crystal Lake-based Centegra is losing so much money.

In a memo to employees today announcing the changes, Centegra CEO Michael Eesley said they will ensure that the system is “financially viable” for years to come.

Still, “The decision to take these steps is among the most difficult that any organization can make,” Eesley wrote. “Although financial pressures have forced us to address our business structure, it feels deeply personal.”

Centegra spokeswoman Michelle Green would not say how much the cuts and outsourcing are estimated to save the system.

The move comes as Centegra, a three-hospital community network, works to finalize a merger with Northwestern Medicine. The Streeterville-based academic health system has been growing fast by scooping up smaller hospitals.

Centegra ended its fiscal year on June 30 with a $62.3 million operating loss for the year, more than double the $30.1 million loss reported at the end of the third quarter for the previous nine months. The financial hemorrhaging was much worse than hospital officials projected for the year, which was to lose up to $40 million.

The financial woes come roughly a year after Centegra opened a new hospital in Huntley. These days, most health systems are focused on the opposite: bulking up cheaper, more convenient outpatient care.

Centegra has blamed some of its financial losses on patients who won’t or can’t pay their medical bills, causing what’s known as bad debt to pile up. Other Chicago-area hospital networks have blamed bad debt, too, for why they are reining in spending. Advocate Health Care and Edward-Elmhurst Health, for example, are making $200 million and $50 million in cuts, respectively.

At Centegra, the layoffs will impact workers throughout the system, including administration and support staff “in an effort to keep changes away from inpatient bedside care,” Green said. Those who lose their jobs will receive full pay and benefits for 60 days, in addition to a “separation package,” the system said in a separate statement.

Centegra also does not plan to fill more than 40 roles that have been vacant since Aug. 1.

Centegra also plans to expand its relationship with nThrive by shifting 230 hospital employees to the Alpharetta, Georgia-based company. NThrive helps hospitals collect medical bill payments from patients, among other services. The company now runs Centegra’s business office and health information management department. In November, nThrive will pick up additional responsibilities, including patient registration and financial counseling.

In other efforts to cut costs, Centegra has asked state regulators for permission to end the bulk of traditional inpatient beds, including intensive care beds, at its Woodstock hospital and relocate some services to its hospitals in Huntley and McHenry.

Centegra plans to join Northwestern Medicine in 2018, Green said.



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