Nearly 200 positions were cut from Providence Health &Services, a health care system based in Renton.
The layoffs reflect a shift in the health care industry, one that’s seen an increase in patients but not in revenue, according to a statement from Providence spokesperson Colleen Wadden.
“Most health care systems are acutely feeling pressures of the industry-wide trend in reduced revenue; reimbursement rates are not keeping pace with the rising cost of delivering care. That’s the fundamental shift in our industry — we are called to provide more care to more patients, but are receiving the same amount of revenue (or less) to cover the costs,” she said in the statement.
Providence, a nonprofit health system that operates in Washington, Oregon, Alaska, California and Montana, has 34 hospitals, 600 physician clinics, 22 long-term care facilities, 19 hospice and home health programs, and 693 supportive housing units. While Wadden did not specify how many Washington or Renton employee positions were cut.
Most of the layoffs were administrative and shared services support positions. According to the statement, 195 system office shared administrative service positions were eliminated across multiple states.
“While this total number is relatively low compared to the thousands of employees within Shared Services departments, every employee is important and this is not a decision made lightly. We will be providing support to our employees during this time,” said Wadden.
Providence has also reduced operational costs, such as vendor and supply contracts, and non-critical capital projects. They have also chosen not to fill non-critical administrative positions.
According to Wadden’s statement, Providence has seen thousands more patients this year than last year. Insurance coverage has impacted the recent increase.
As of 2016, more than 20 million people who are enrolled in Medicaid live in the states Providence serves. Of that, Wadden said roughly five million can be attributed to Affordable Care Act coverage expansion.
“We are a safety net for many patients, especially those with Medicaid and are deeply committed to continuing to serve this vulnerable population,” she said.
The trend is reflected nationwide. According to The Medicaid and CHIP Payment and Access Commission, a legislative branch agency that provides policy and data analysis, Medicaid enrollment increased by 16.7 million — 29.4 percent — from 2013 to May 2017. Much of the increase is attributed to states that expanded Medicaid to cover new adult growth. According to the agency, this increase is considered the largest growth in Medicaid enrollment.
Providence isn’t the first local health care system to cut positions due to recent trends. In May, Valley Medical Center eliminated 60 positions for similar reasons.