Northern Light Health to shift 1,400 employees to health services company

Northern Light-weight Wellness is shifting 1,400 staff members – which includes 130 in southern Maine – to an outside overall health expert services enterprise, a shift that best officials say will help save the medical center procedure $1 billion over 10 yrs.

The 1,400 staff will no for a longer period function for Northern Gentle Health and fitness starting off in March, but alternatively will function for Optum, a Minnesota-based mostly health and fitness products and services corporation. The staff members will continue to be in Maine, keep their positions, will not working experience any cuts to their pay and will acquire very similar added benefits, mentioned Paul Bolin, main folks officer and senior vice president at Northern Gentle Health and fitness.

The move is section of a nationwide craze by healthcare facility operators to decrease expenses by outsourcing billing and assist functions.

Northern Gentle Wellbeing – the 2nd-greatest well being treatment enterprise in Maine with about 12,000 staff – is the mum or dad business of Japanese Maine Health-related Heart in Bangor and Mercy Clinic in Portland, rural hospitals in northern Maine and a massive network of outpatient products and services.

Most of the positions are not work that straight treatment for individuals – this sort of as medical practitioners and nurses – but are business-dependent administrative positions such as “revenue cycle administration, information systems, inpatient care administration, analytics, undertaking administration office environment and offer chain,” Northern Light Overall health mentioned in a statement. The bulk of the positions shifting to Optum are at the dwelling business office of Northern Mild Health in Brewer. About 130 jobs in southern Maine will come to be Optum careers, most centered at Mercy Hospital.

Tim Dentry, president and CEO of Northern Gentle Wellbeing, mentioned in an interview that the financial forecast for hospitals, specifically larger hospitals such as EMMC, is “unsettled” and so they had to glimpse at techniques to save funds to protect main wellness treatment providers.

“Nobody was going to save the working day for us in health and fitness treatment,” Dentry stated.

Steven Michaud, president of the Maine Hospital Association, expects the weak economical picture to go on as hospitals check out to lower prices although maintaining significant solutions. Workforce shortages exacerbated by the pandemic are restricting the variety of clients hospitals can serve, ensuing in a lot less revenue.

“Hospitals are experiencing unparalleled losses coming out of the pandemic, and there is no rationale to believe that it is heading to switch all over anytime before long,” Michaud claimed. “With the workforce lack, we have loads of individuals, but it’s tougher to get them as a result of processes and surgeries.”

Michaud said the exact same workforce dynamic also would make it a lot more tricky to discharge people who aren’t all set to go home, but are ready to be despatched to assisted living for recovery or mental health and fitness sufferers needing placement. That is also leading to less income for hospitals. Merged with enhanced labor costs, inflation and expiring pandemic relief money, hospitals are dealing with a rocky monetary outlook, Michaud stated.

Northern Gentle Wellbeing had about $2 billion in revenue in the 2021-22 fiscal calendar year, but fees surpassed revenue and working losses are at about $132 million, claimed Northern Mild Health spokeswoman Suzanne Spruce.

MaineHealth – the premier well being program in Maine with 22,000 staff members and the guardian organization of Maine Medical Heart in Portland – is not thinking about outsourcing work opportunities at this time, but CEO Dr. Andy Mueller explained in a assertion that the pandemic has “placed unparalleled strain on the well being treatment industry” that will “require all of us to be innovative and rethink our small business.”

Mueller explained MaineHealth has dropped income two of the previous 3 several years.

The profits crunch is main numerous clinic systems to seem for imaginative approaches to minimize prices, Michaud explained.

Brooke LaTour, spokeswoman for Optum, reported that “Optum has comparable relationships like this with a handful of other overall health programs across the U.S. and we have found interest mature in the past a few to four yrs.” Its most new contract prior to Northern Gentle was to present very similar companies in Marin County, California, in the vicinity of San Francisco.

Northern Light-weight also recently bought its outpatient lab operations to New Jersey-dependent Quest Diagnostics, ensuing in about 340 positions currently being transferred from Northern Gentle to Quest. That sale was finalized in early December, and the transfer occurred in January.

Traci St. Clair, business enterprise agent for Teamsters Local 340, said that a little additional than a dozen workers functioning various positions at the lab are Teamsters customers, and they are commencing to negotiate a new deal with Quest.

“Our discussions have been good, but we haven’t sat down with them at the negotiating desk however,” St. Clair explained. “It’s extremely early times.”

It does not show up that any of the positions transferring to Optum are represented by a union.

St. Clair claimed, nonetheless, that she’s worried about the general development of outsourcing and no matter whether it will guide to even worse services for people, worker layoffs in the years to appear or decreased pay out and advantages.

“It’s concerning,” St. Clair said. “What is the stop game?”

In the end, St. Clair explained, Northern Light-weight is accountable for all solutions, even ones outsourced to providers like Optum.

Dentry mentioned that in excess of time some of the jobs shifted to Optum will be shed to attrition as employees depart. That is since Optum has created-in efficiencies for supplying comparable services to health treatment devices across the country, he mentioned.

Also, obtaining Optum fork out for overhead prices on IT devices, other technological innovation, devices and supplies will conserve funds about the lengthy phrase, he said.

Dentry explained the base line is that Optum can present the exact same assistance at a much less expensive value to Northern Light.

He said that will help its clinics and hospitals these kinds of as EMMC, which is facing money pressures from workforce shortages and the elevated price of owning to pay for journey nurses to fill gaps.

“This choice by Northern Light is going to take a enormous amount of money of pressure off of particular person entities like EMMC,” Dentry explained.


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