The project has identified 14 hospital-administered generic drugs as its initial focus to stabilize the chronically short supply and lower costs, and could release its first products in 2019.
A consortium of health systems and foundations that earlier this year announced plans to create a not-for-profit generic drug company has given the enterprise a name and a leader.
The company will be called Civica Rx, and it will be led by CEO Martin VanTrieste, a former chief quality officer at Amgen, who will serve without compensation, according to a media release from the consortium.
"The generic drug marketplace is broken and, in response, we have created a unique and innovative fix—a public utility that is governed, exclusively, for the good of the people it serves," said Richard J. Gilfillan, MD, CEO of Livonia, Michigan-based Trinity Health, one of seven health systems invested in the project.
"Civica Rx will not earn profits for its investors, but will, instead, ensure that patients receive the greatest benefit—access to the drugs they need at affordable price points," Gilfillan said.
Civica Rx has identified 14 hospital-administered generic drugs as its initial focus, seeking to stabilize the supply of essential medications, many of which face chronic shortages. The company expects to release its first products as early as 2019.
Civica Rx is organized as a Delaware non-stock, not-for-profit corporation, and will be based in Utah.
"The formation of Civica Rx is a direct challenge to generic drug companies who have sharply and unfairly raised prices on many off-patent drugs over the last several years," said Shelley Lyford, President and CEO of the Gary and Mary West Foundation, one of three national foundations that have each committed $10 million to the project.
"We all pay a price, and lower-income patients shoulder a particularly heavy burden," Lyford said. "This intolerable situation has escalated to a public health crisis. It’s time to put patients before profits and begin the transformation of healthcare that Americans deserve. We’re confident Civica Rx provides a critical initial step with incredible potential."
With Trinity Health, the governing members of Civica Rx represent nearly 500 hospitals nationwide, and will include: Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, and SSM Health.
The other foundations investing $10 million each in the project are The Laura and John Arnold Foundation, the Peterson Center on Healthcare.
The Department of Veterans Affairs will consult with Civica Rx, and more health systems are expected to join the consortium later this year.
Sixteen people, including top hospital executives, have been convicted for their roles in the long-running fraud scheme at Riverside General Hospital.
A Texas psychiatrist was sentenced to more than 12 years in prison this week for his role in a $155 million Medicare fraud scheme that ensnared top executives and clinicians at Houston's Riverside General Hospital, the Department of Justice said.
Riyaz Mazcuri, 67, a former psychiatrist at Riverside, was convicted by a federal jury in 2017 on charges that included five counts of healthcare fraud. He was also ordered to pay $20.6 million in restitution to Medicare and $2.2 million to Medicaid.
At his 2017 trial, prosecutors showed that Mazcuri and others at Riverside submitted more than $155 million in bogus claims to Medicare between 2006 and 2012, using the hospital's partial hospitalization program for patients with severe mental illness.
Prosecutors showed that Mazcuri "indiscriminately admitted and readmitted patients into these intensive psychiatric programs–often for years on end–many of whom suffered from severe Alzheimer's or dementia and were unable to participate in the treatment purportedly provided at the PHPs, and who therefore did not qualify for the services," DOJ said.
The psychiatrist falsified medical records and signed false documents to make it appear as if patients admitted to the PHPs needed and received the intensive psychiatric services. He also personally billed Medicare for psychiatric treatment he purportedly provided to Riverside's PHP patients—treatment he never actually provided.
All totaled, Mazcuri's signature enabled Riverside to bill Medicare for more than $55 million of the total $155 million that Riverside billed Medicare.
Sixteen executives, clinicians and assorted scammers have been convicted for their roles in the Riverside fraud, including Earnest Gibson III, 73, the former president of Riverside; Earnest Gibson IV, 41, the operator of one of Riverside’s PHP satellite locations.
Earnest Gibson III was sentenced to 45 years in prison. Earnest Gibson IV was sentenced to 20 years in prison.
Mohammad Khan, 68, an assistant administrator at the hospital, who managed many of the hospital’s PHPs, was sentenced to 40 years in prison. Sharon Iglehart, 61, a physician, was sentenced to 12 years in prison. Walid Hamoudi, 66, a physician, was sentenced to five years in prison.
Riverside—Houston's first nonprofit hospital for African Americans—was shuttered soon after the scandal broke in 2012. Harris County (TX) Commissioners voted this spring to buy the hospital and reopen it as a mental health facility.
Two first-year reviews show patient discharges to institutional post-acute care are lower, and hospitals don't appear to be gaming performance measures.
Two new studies in JAMA this week identify moderate successes in the first year of Medicare's Comprehensive Care for Joint Replacement bundled payments program.
One study, led by MIT economist Amy Finkelstein, examines changes in discharges to institutional post-acute care after hip or knee replacement surgery in 2016, the first year that the CJR bundled payments were implemented.
The study found that the mean percentage of patients discharge into institutional post-acute care was 33.7% in the control group, which was 2.9 percentage points lower in metropolitan statistical areas covered by the CJR, which the study authors called "a significant difference."
"These interim findings suggest that CJR may reduce institutional post-acute care following lower extremity joint replacement episodes among Medicare beneficiaries," the Finkelstein study said, adding that further evaluation is needed as the program rollout continues.
The second JAMA study, by researchers at the University of Pennsylvania, also examines the changes in patient discharge to institutional post-acute care in 2016, but looks to see if hospitals are gaming the program by increasing volumes.
The Penn observational study, which examined more than 1.7 million Medicare beneficiaries who underwent lower joint replacement surgery, also found scant evidence that hospitals shift toward healthier patients because bundled payments don't account for severity.
"The lack of associations between Bundled Payments for Care Improvement program participation and changes in volume or the majority of patient case-mix factors may provide reassurance about two potential unintended effects of voluntary bundled payments for lower extremity joint replacement," the Penn study found.
In a JAMA editorial accompanying the two studies, University of Michigan health economist Andrew M. Ryan called the findings "encouraging."
"Given the increasing number of joint replacements at younger and younger ages, it is important that these procedures be a focus of cost and quality initiatives," Ryan said, adding that both studies demonstrate that "prospective payment to hospitals can be improved through common sense and straightforward bundled payment reforms."
However, Ryan said CMS "is rightfully concerned that severity adjustment may become a means for hospitals to up-code severity and 'game' the program."
"This tension between appropriately accounting for variation in hospital risk while minimizing the ability for hospitals to game performance measures is central in alternative payment models," he said.
"One solution may be for CMS to incorporate more risk adjustment in these programs, coupled with more aggressive auditing of hospital records."
CEO Steve Clapp says the four-hospital rural health system 'hit our targets' with expense reductions, but couldn't overcome a 'problematic' decline in net revenues.
Nearly two years after acquiring three rural hospitals in Mississippi and doubling its size, Clinton, Tennessee-based Curae Health has filed for bankruptcy.
Curae Health CEO and President Steve Clapp spoke with HealthLeaders Media about the filing, the factors that led to it, and the challenges facing rural healthcare in the United States. The following is a lightly edited transcript.
HLM: What factors led to the bankruptcy?
Clapp: Our organization is small and doesn't have the deep pockets like other organizations. So, it was very important that we hit the numbers that we needed to make this thing work.
The biggest thing that really hit us was a significant decline in net revenues after we acquired the hospitals. We hit our targets in terms of expense reductions and savings that we had anticipated when we took over. But that net revenue declined was just too problematic.
Physician turnover contributed a little bit. There were delays in the Medicare extender programs in Congress. Those had ceased in October 2017 and didn't get reinstated until the spring, and it was just within the last 60 days that we've been paid on our low-volume adjustment.
We had some challenges obtaining financing on our information systems, so we had to compress a little bit of the financing there. It was just a series of things.
HLM: When you acquired these hospitals it doubled the size of Curae. Do you think that the expansion may have been too rapid?
Clapp: Part of the desire to acquire these hospitals was the proximity to the hospitals that we owned. We felt like we can we can add these hospitals and manage them effectively. We'd had the Alabama hospitals at that point for a little over two years. We thought there were synergies that we could achieve. We had waited a couple years before we made another acquisition, so I felt like the integration was fine. It was a net revenue decline in the big picture.
HLM: What will happen to Curae Health when the bankruptcy proceedings are completed?
Clapp: We'll have one hospital left that's not in bankruptcy in Russellville. We divested the other two hospitals to the local communities in Alabama. We are in the process of seeking buyers for the Russellville hospital as well. We have a letter of intent on that one as well. Curae will eventually divest all of its hospitals. Once all the legal proceedings and processes are worked out we will cease to exist.
The vision was correct in terms of what we're trying to accomplish. But the circumstances didn't plan out to pan out like we had hoped.
HLM: As you look for buyers for these three hospitals, what are the selling points?
Clapp: What attracted us to these hospitals was the fact that they had sufficient revenue. These were larger facilities than we had traditionally focused on, generating anywhere from $35 million to $60 million in revenue. So, they are bigger, and the communities are bigger. These are hospitals that should stay in place and they will in the long term. The community has built a medical community around it to make it work. There's a good physician base in place. There's good community support to keep these hospitals open and operational.
The bankruptcy court process, for lack of a better term, becomes an auction process and our intent is to find stalking horse bidders for each of the hospitals and then there will be an auction process once that initial stalking horse bid is put in place.
HLM: Is Curae Health a microcosm of the problems that rural hospitals face everywhere in this country?
Clapp: Yes. Interestingly enough, we were not the only Mississippi hospital to the file for bankruptcy (on Aug. 24). There was a hospital in Magee. We've seen over 800 rural hospitals close in the last 30 years. That's almost 25%. The number of urban hospitals has stayed flat at about 3,100.
The crisis in healthcare is in rural America, not in urban America. Urban communities are still producing a lot of development projects, a lot of expansion projects at a much higher cost to Medicare and Medicaid than what it would be to keep these smaller hospitals open and provide the services out there.
HLM: Was the Medicaid non-expansion in Mississippi a factor?
Clapp: I'm cautious as to how to address that. There are two sides to that coin. Obviously, from a hospital perspective, you love to have more insured folks. On the flip side, somebody's got to pay for it. That's the balancing act.
HLM: What are the unique challenges for rural hospitals?
Clapp: It depends on who you talk to. Tertiary hospitals will tell you they've got the same problems, but we're not doing $100 million expansions. We've got declining populations in these communities. The younger generation does not necessarily want to live in these communities. We have aging facilities that we're not able to adequately maintain or recapitalize. Some of these states that we operate in, Alabama, Mississippi and Tennessee, have a significant disadvantage relative to wage rate indices. They're particularly low.
HLM: How will rural hospitals evolve to adapt to these challenges?
Clapp: Eventually, rural hospitals are going to end up in one of four buckets. They're either going to end up with a larger health system, or they're going to go back to the community, or at least require some type of community subsidy, like we did 40, 50, 60 years ago.
The third thing is from an operating model perspective. Do we need to create the freestanding outpatient center model that has an emergency room with it? That allows hospitals to transition to another type of entity to ensure that we have some availability of local healthcare.
That can be a freestanding ER, which as originally designed was a good idea. The concept got used in large communities as a competitive tool, rather than as a means to provide emergency services. You don't need one more ER in an urban setting, but you do need one ER and an outlining county that has no other services.
On the outpatient side, it's a piecemeal deal. The primary care is in a physician billing level and your diagnostics and even your surgery can be paid at less-than hospital rates, and the ER becomes more like an urgent care. You can't operate a 50,000-to-100,000 square-foot building on those kinds of reimbursements. We have to create another model.
The fourth option is some of these hospitals will close. If you only have 1,000 admissions, it's hard to justify keeping a hospital open because it's a 24/7 operation. You can create an 18-hour operation that provides for the needs of the community and helps out with the EMS runs that have to go out of town all.
Under a definitive agreement reached this week, Mission Health will continue to manage its seven hospitals in western North Carolina, while HCA runs operations, capital access, predictive modeling and analytics.
HCA Healthcare announced Friday that it will pay $1.5 billion to acquire Mission Health, a seven-hospital, nonprofit health system based in Asheville, North Carolina.
"Mission Health is the premier healthcare system in western North Carolina, with a 130-year tradition of high quality patient care," Milton Johnson, HCA chairman and CEO, said in a media release.
"We look forward to continuing Mission Health’s focus on excellence, and investing in western North Carolina to improve the health of the region," he said.
Under the deal, "nearly all" Mission facilities will become part of HCA while continuing to operate under the Mission brand. Mission will continue to be managed locally while HCA runs operations, capital access, clinical trials, research, predictive modeling, and analytics, the media release said.
Mission Health's tax status would change to for-profit with the acquisition.
The HCA-acquired hospitals are: 763-bed Mission Hospital in Asheville; 80-bed CarePartners Rehabilitation Hospital in Asheville; 49-bed Mission Hospital McDowell in Marion; 25-bed Angel Medical Center in Franklin; 25-bed Transylvania Regional Hospital in Brevard; 25-bed Blue Ridge Regional Hospital in Spruce Pine; and 24-bed Highlands-Cashiers Hospital in Highlands.
Nashville-based HCA said it will spend $430 million over five years for the completion of the Mission Hospital for Advanced Medicine, building a replacement hospital for Angel Medical Center and building a new Behavioral Health hospital.
The proceeds from the sale will be combined with Mission Health's remaining cash and investments and will be used to fund the newly formed Dogwood Health Trust, a population health initiative serving western North Carolina.
"From the very beginning, Mission Health's Board worked diligently and continually to ensure that the very best path was selected for the people of western North Carolina and to make certain that our community has access to high quality, effective and compassionate care for generations to come," Mission Health Board Chair John R. Ball, MD, JD, said in prepared remarks.
"After completing due diligence and finalizing definitive agreements that have significant protections for our rural communities, we are convinced that HCA Healthcare is the right and best choice for western North Carolina and Mission's team members, providers and patients. It is heartening to share that every single Mission Health member entity Board voted unanimously to approve this transaction," Ball said.
HCA said it will maintain clinical services for at least five years and keep open all rehabilitation and acute-care hospitals for at least 10 years, other than St. Joseph’s Hospital which was already planned for transition.
HCA has agreed not to sell any rehabilitation or acute-care hospital for a minimum of 10 years. None of these protections exist for Mission Health programs or facilities today.
In addition, HCA and Mission will each contribute $25 million to create a $50 million innovation fund to encourage healthcare investment in the region.
The deal is subject to the approval of North Carolina state regulators, including an evaluation by the state's attorney general, to ensure that it will benefit people in the service area, and that HCA is paying a fair price, Mission said.
Four Mississippi hospitals have declared Chapter 11 in the past week, and five rural hospitals in the Magnolia State have closed since 2013.
Curae Health and three affiliated hospitals in Mississippi have filed for bankruptcy protection after claiming more than $96 million in liabilities, the Clinton, Tennessee-based hospital chain announced this week.
The affiliated Mississippi hospitals are: Gilmore Memorial Hospital, in Amory; Panola Medical Center, in Batesville; and Northwest Mississippi Medical Center in Clarksdale, which Curae leases.
Four Mississippi hospitals filed for Chapter 11 in the past week, including unaffiliated Magee General Hospital, which filed last Friday.
Curae said in a media release that the goal of the bankruptcy filing was "to ensure that the communities where these hospitals are located will continue to have access to local healthcare services."
The not-for-profit health system blamed insolvency on "several factors."
"Many rural hospitals across the country have faced year-over-year financial challenges due to government funding cuts, unfunded care mandates and other pressures," Curae said.
"Our hospitals were not immune to these issues and after exhausting other possibilities, the decision was clear that the hospitals could not continue to operate under mounting debt and tightening financial resources," the statement read.
Those pressures included unexpected expenses related to electronic medical records and a cash crunch that came as vendors demanded payment for outstanding debts.
Curae said the bankruptcy became the only viable course because cost-savings measures were outstripped by "a dramatic decline" in net revenues that came immediately after the hospitals were acquired from Community Health Systems in 2016.
Local media reported that bankruptcy filings made in Nashville showed that Curae Health and the three hospitals have $3.4 million in cash and cash equivalents and $96 million in liabilities. It owes lender ServisFirst $18.8 million. It owes Community Health Systems, which previously owned the three hospitals, $28.6 million.
"The conversion to a not-for-profit system combined with a lower cost structure was unable to keep pace with the dramatic decline in revenue," Curae said.
Ownership of Curae's Lakeland Community Hospital in Haleyville, Alabama, was transferred to a local authority this spring and it's now managed by Java Medical Group. Curae's fourth hospital, Russellville Hospital in northwest Alabama, has not filed for bankruptcy.
Going Forward
Curae says its 1,245 employees will be paid through the bankruptcy proceedings.
The health system's Mississippi hospitals "will be sold as going concerns to arms-length third parties who are able to keep them in operation so that they can continue to serve the community."
"All potential acquirers of the hospitals will have the opportunity to express their interest in acquiring one or all of the hospitals and to bid for them in a fair and open process," Curae said.
"We have been working with various interested parties to assist them in their review of the hospital(s) and anticipate filing a motion with the bankruptcy court to authorize the sale of the hospitals in the near term. Once the legal process is completed we hope the hospitals will emerge in a stronger financial and market position," Curae said.
As the Trump administration backs a repeal of the individual mandate, a new study offers a 'conservative estimate' on threats to coverage in the individual market.
More than 52 million Americans under age 65 have a pre-existing medical condition that would likely leave them uninsured in the individual market under state regulations that existed before the Affordable Care Act was enacted.
That's according to a new Kaiser Family Foundation issues brief, which notes that many in this potentially vulnerable group of adults, representing 27% of the total population, now get their coverage through their employers or government programs, and do not have to face medical underwriting on the individual market.
However, KFF says the findings provide a perspective on how many people would be at risk under pre-ACA standards if they were to lose their coverage.
"This is a conservative estimate as these surveys do not include sufficient detail on several conditions that would have been declinable before the ACA (such as HIV/AIDS, or hepatitis C)," the brief said.
"Additionally, millions more have other conditions that could be either declinable by some insurers based on their pre-ACA underwriting guidelines or grounds for higher premiums, exclusions, or limitations under pre-ACA underwriting practices," the brief said.
The study comes amid ongoing efforts by the Trump administration and Congressional Republicans to repeal or hobble the ACA, and give states the opportunity to re-impose coverage denials for pre-existing conditions.
Most recently, the Trump administration's efforts to kneecap the ACA includes efforts to have the individual mandate declared unconstitutional by the U.S. Supreme Court. Critics contend that removing the mandate would destabilize the individual insurance markets and lead to their collapse.
Among the findings:
Nearly 30 million non-elderly women and 22.8 million non-elderly men have declinable preexisting conditions. Pregnancy accounts for some of the difference.
The rates of declinable pre-existing conditions vary from state to state, from 41% in Kingsport, Tennessee to 20% in Logan, Utah and Rochester, Minnesota.
Rates are higher in other states, particularly in the South, where in Tennessee (32%), Arkansas (32%), Alabama (33%), Kentucky (33%), Mississippi (34%), and West Virginia (36%), at least one-third of the non-elderly population would have declinable conditions.
The prevalence of pre-existing conditions can vary by 10% or more between cities in the same state. For example, in Kansas 32% of Topeka’s population has a pre-existing condition, as compared to 21% of Manhattan’s population.
Prosecutors allege that an East Texas health system and its affiliated ambulance company tapped a slush fund to pay kickbacks that secured ambulance contracts.
Seven ambulance industry defendants will pay the government more than $21 million to settle whistleblower allegations of kickbacks and bribes paid to local government authorities in three states to secure ambulance contracts, the Department of Justice said.
Federal prosecutors said that Tyler-based East Texas Medical Center Regional Healthcare System, Inc., East Texas Medical Center Regional Health Services, Inc., and affiliated ambulance company, Paramedics Plus, LLC allegedly created a "slush fund" controlled by ETMC and Paramedics Plus that funneled the kickbacks to municipal emergency services providers in California, Florida and Oklahoma.
The government authorities identified by prosecutors include: Emergency Medical Services Authority, Alameda County, California; Pinellas County Emergency Medical Services Authority in Florida; and Oklahoma's Emergency Medical Services Authority.
Federal prosecutors said the kickbacks and bribes included cash payments, political contributions, marketing expenses, direct payments to the Oklahoma EMSA's contractors, and a direct payment of $50,000 to former EMSA President Herbert Stephen Williamson, which prosecutors said was for his "personal benefit."
The bulk of the settlement, $20.6 million, will be paid by ETMC and Paramedics Plus. Alameda County's Emergency Medical Services Authority will pay $300,000.
Williamson will pay the federal government and Oklahoma $80,000, which prosecutors said was based on what he could afford.
"Paramedics Plus paid millions of dollars in illegal inducements over the course of a number of years," said U.S. Attorney Joseph D. Brown for the Eastern District of Texas.
"Williamson allegedly received gifts and also directed Paramedics Plus to make political contributions to Oklahoma politicians, which EMSA could not do on its own," Brown said.
"Sophisticated healthcare companies do not simply give away millions of dollars to referral sources without expecting something in exchange. Quid pro quo arrangements for the referral of health care business are illegal," he said.
The whistleblower suit was originally filed in 2014 by Stephen Dean, who was the chief operating officer at Paramedics Plus and oversaw the EMSA contract. Dean will collect $4.9 million as his share of the settlement.
East Texas Medical Center Regional Healthcare System was purchasedin May by Ardent Health Services and The University of Texas Health Science Center at Tyler and is now part of the 10-hospital UT Health East Texas system.
Depending upon the region, Blue Cross NC said, ACA premiums will fall by as much as 22%, or rise by as much as 9.5%, with a statewide average drop of 4.1%.
For the first time since entering the Affordable Care Act marketplace in 2014, Blue Cross and Blue Shield of North Carolina will reduce premiums statewide in 2019 for most of its 475,000 Obamacare customers.
Depending upon the region, Blue Cross NC said ACA premiums will fall by as much as 22%, or rise by as much as 9.5%, with a statewide average drop of 4.1%.
The North Carolina Department of Insurance approved the plans this month.
The health insurer's ACA plans in the Triangle around Raleigh, Durham and Chapel Hill will see an average premium decrease of 21% in 2019, which translates into a pre-subsidy average of $140 a month under a new provider agreement with UNC Health Alliance.
"Our agreement with UNC Health Alliance allows us to offer similar plans, but at a significantly lower cost," Blue Cross and Blue Shield of North Carolina CEO Patrick Conway said in amedia release. "What makes this possible is that UNC agreed to partner with us on an arrangement where we're both responsible for the quality and total cost of care."
The health insurer is ending its ACA Blue Local partnership with Duke Health and WakeMed, which now has about 50,000 customers in 12 counties. Blue Cross NC said the new plan will offer "similar benefits."
"We will work with our current Blue Local customers to find in-network providers, and make sure they are getting the care they need throughout this transition," Conway said.
Blue Cross NC said it has lost more than $450 million during the first three years of the ACA, but remains committed to offering coverage in all 100 of North Carolina's counties.
On average, premiums will fall by $1,680 a year for ACA customers in the Triangle. Premiums are expected to drop by about 16% for ACA members in the Charlotte and Gastonia areas, which with the Triangle comprise 40% of ACA members in North Carolina.
Statewide, Blue Cross NC said the rate decrease translates into a $120 million cut in healthcare costs in 2019.
'Wait and See'
Blue Cross NC representatives did not specify how they plan to cover the $120 million savings. Under state regulations they don't have to disclose cost sharing or benefits packages before the enrollment period opens this fall, says Brendan Riley, a health policy analyst with the North Carolina Justice Center.
"It's wait and see at this point, but overall it's promising to see that premiums can actually come down in some areas," Riley says. "We know they are ACA compliant plans so they are full comprehensive coverage. They meet the essentially health benefits requirements, so it's not like the Trump-endorsed alternatives such asshort-term plans."
Riley says the savings likely will come from a narrower provider network, particularly in the Triangle and Charlotte areas. "There is a risk that by narrowing the network some consumers may have a harder time finding the doctors they need, especially specialists, but we don’t know that for certain yet," he said.
Blue Cross NC said the decision to partner its ACA plans with UNC Health Alliance in the Triangle "was the result of a competitive process between the area's hospital systems. The decision was based on which system could provide customers with the lowest rates, while continuing to offer them access to the highest quality care."
Matt Ewend, MD, a neurosurgeon and president of the UNC Physicians, says the new arrangement with BlueCross NC "will be a stretch, but we're pushing ourselves to do this."
"There is a realization from our organization and Blue Cross that we can't just keep spending more and more," Ewend says. "We decided as an organization that, instead of sitting back and letting this happen around us, we wanted to get out in front of this. We think in five years from now everyone will be doing this."
"A tight partnership with Blue Cross is step one. The second thing is we have to reduce the overall cost of care by getting patients to the right site and reducing unnecessary variations in care. It's preventative care over fixing the problem."
"The third thing is we have to partner with the patients," Ewend says. "We need folks to understand that they're signing up for health insurance that is less-expensive than it was before, which is remarkable, but they have to be part of the solution to make that possible. So we have to engaged them in their own health."
Health system says the 'majority' of the layoffs affect corporate positions, and another 60 vacant positions will not be filled.
Toledo-based ProMedica says that it laid off 100 workers in leadership and corporate areas this month as part of an ongoing effort to cut costs and improve efficiency.
"The healthcare industry continues to face a series of challenges, including decreasing reimbursement rates for services and rising operational costs. To adapt, health systems around the country have had to make tough financial decisions," Karen Strauss, ProMedica's chief human resources officer, said in prepared remarks.
The "majority" of the approximately 100 affected employees serve in leadership and corporate roles, she said. In addition, 60 vacant "non-direct patient care positions" will not be filled.
The layoffs are unrelated to the $3.3 billion joint acquisition with private equity firm Welltower of bankrupt long-term care provider HCR ManorCare, Strauss said. The deal was finalizedlate last month.
Strauss said that while the joint venture is expected "to bring opportunities for growth and synergy, we still must address pre-merger ProMedica financial issues now."
It's been an eventful year for ProMedica.
The acquisition of ManorCare, the nation's second-largest long-term and post-acute care provider, essentially doubled the size of 13-hospital ProMedica overnight and gave it a footprint in 30 states. ProMedica CEO Randy Oostra said the acquisition was needed because ProMedica was situated "in a non-growth market" and had few other options to expand or diversify.
"I hate to say we are in uncharted waters here, but it seems to be a unique, first-of-its-kind partnership. A nonprofit health system, a large post-acute provider and a real estate investment trust as partners is unique," ProMedica CEO and President Randy Oostra said in an interview with HealthLeaders Media this spring.
Earlier this month, ProMedica formed a joint partnership with Sonic Healthcare USA called ProMedica Pathology Laboratories, which will provide lab tests for inpatients at health system and affiliated providers in Ohio, Michigan and parts of Indiana.
