Noting rising expenses and reduced reimbursements, Reid Health has cut about 25 jobs and is closing three departments, an urgent care and a fitness center.
A consultant helped Reid Health Governing Board identify opportunities to streamline organizational operations, reduce costs and improve efficiencies, the health system noted in a news release.
On Tuesday, July 11, Reid announced it was closing its massage therapy, employee wellness and sports performance departments, along with Connersville’s HealthWorks Fitness Center, which will close July 31.
Then, on Monday, July 17, Reid officials announced Reid Health Urgent Care in Eaton, Ohio, would close Aug. 11. Conversations are underway with a local business about moving into that office.
Craig Kinyon, Reid Health president/CEO, said in the release that the financial shortfall is growing, and changes are necessary because the current model isn’t sustainable. He compared the situation to tough conversations that families have around the kitchen table during hard times.
Thus, over the past few weeks, Reid began reducing duplication and costs within its executive leadership and middle management teams.
After being asked for more specifics about the cuts, Reid officials told media Friday, July 14, they have a projected $48 million financial annual gap that must be closed “to remain solvent for years to come.”
“As part of this ongoing process, the organization eliminated approximately 25 positions this week,” the updated statement said.
Affected employees can apply for other open positions for which they’re qualified, and some have chosen to stay, the release said.
However, employees affected by the closure of the urgent care at 109B E. Washington-Jackson Road in Eaton will be reassigned to other Reid facilities.
The closure of that urgent care office won’t negatively impact Reid Eaton Family & Specialty Care at 550 Hallmark Drive, according to Reid officials.
Eaton Family & Specialty Care’s office has a doctor and two nurse practitioners and staff, and hosts providers from Reid OB/GYN, outpatient behavioral health, pulmonary care and rehabilitation services. More information will be available in the coming days about expanded opportunities to receive care there, the release said.
Reid officials say they’re not alone in facing reduced reimbursement rates from insurance providers, especially Medicare Advantage and Medicaid.
“Recently, health care systems across the country have been battling a widening imbalance between rising costs related to inflation and reimbursements that haven’t kept up with those costs, resulting in major financial issues unlike any Reid has dealt with in the past,” the release noted.
In addition, some insurance companies are slow to reimburse Reid for patients with commercial insurance after care has been delivered, and in many cases, claims are even outright denied despite having prior authorization, the release said.
Reid officials noted these factors:
- Reduced volumes, especially in inpatient services
- “Skyrocketing” labor and supply costs driven by high inflation that exceeded 8% this year
- Tightening reimbursement from commercial and governmental payers that isn’t keeping up with rising expenses to provide care (the traditional Medicare increase was only 2% this year versus an 8%-plus inflation in Reid’s costs to provide that care)
- Continued challenges with effectively reduced payments from many Medicare Advantage programs when compared to traditional Medicare
- Difficulty receiving timely payment from various insurance providers
Some other Hoosier health providers are also trimming services or facilities.
For instance, Indiana University Health Blackford announced June 28 it would end emergency and inpatient care in Hartford City in the coming months. IU Health’s next closest facilities are in Muncie and Portland, about 30 minutes away.
Ascension St. Vincent recently closed a hospital in Bedford as well as 11 primary care and other centers across central Indiana.
“Health care organizations across the state and nation are making difficult decisions to stay afloat in this challenging environment,” said Brian Tabor, president of Indiana Hospital Association, in the release.
“I’m concerned we may see more reductions in hospital services over the coming months as Medicare and Medicaid payments continue to fall further below the cost of delivering care, exacerbating the fragile state of hospital finances,” Tabor said. “We need Congress to reject proposals that would impose Medicare cuts and urge the State of Indiana to provide short-term Medicaid relief to avoid this trend continuing across the state.”
Updated July 17 at 5:32 p.m. to include newly released information about the closing of the Eaton urgent care facility.
A version of this article appeared in the July 19 2023 print edition of the Western Wayne News.