PeaceHealth looks for revenue boost

Some options to increase collections could change employees' situations

By Aaron Corvin, Columbian port & economy reporter

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PeaceHealth is considering two options to boost its annual net revenue by at least $20 million. One alternative involves outsourcing hundreds of workers to a contract employer.

Details of the Vancouver-based health-care giant's plans haven't been worked out, officials said. No final decision has been made, they said, and no layoffs are expected.

But PeaceHealth's discussions with Conifer Health Solutions and Huron Consulting Group — the two companies offering different options — are putting employees on edge.

"This feels very 'corporate,' like the outsourcing we read about with other industries," according to an internal document, obtained by The Columbian, that includes questions posed by employees to managers. "Is PeaceHealth going to become just like all the other employers out there?"

PeaceHealth spokeswoman Jenny Ulum said "the effect on our caregivers" — PeaceHealth's term for employees — "is one of the top considerations as we make this decision."

PeaceHealth's move to boost revenues is occurring amid big changes in the health care industry, including federal health care reform. Meanwhile, PeaceHealth is advancing cost-cutting initiatives and seeking a partnership with Catholic Health Initiatives.

Not about a reduction

The revenue-boosting options would affect as many as 930 PeaceHealth employees, across operations in Washington, Oregon and Alaska, in patient financial services -- including billing and customer service personnel -- and in health information management, according to Ulum.

Ulum said about 300 of those workers are based in Vancouver, where PeaceHealth operates its shared services center — which encompasses its corporate headquarters — and PeaceHealth Southwest Medical Center.

Although it has already cut some positions through attrition, PeaceHealth does not expect any job losses as a result of its eventual decision over how to best increase revenue, Ulum said.

"This isn't about a reduction," she said. "This is a program to increase revenue collection for the organization." Whatever its choice, PeaceHealth hopes to increase net revenue by at least $20 million annually.

Under one option, the affected employees would go to work for Conifer, under contract with PeaceHealth.

The other choice, offered by Huron, would see workers remain employed by PeaceHealth. Huron would provide new technology and employee training aimed at capturing more revenue.

Illustrating concerns

PeaceHealth's internal "frequently asked questions" document, dated Jan. 22, shows employees have many questions and concerns. The question of whether employees' pay and benefits would stay the same with Conifer "is part of what we're looking at, and will be a key topic of discussion with Conifer if we pursue this option," according to PeaceHealth.

It would be up to employees to decide whether to accept employment with Conifer, managers say in the document. "We haven't gotten to the point of developing options for caregivers who don't choose to make the transition," they say.

Ulum said the Conifer option came to PeaceHealth's attention from Catholic Health Initiatives, which used Conifer in a similar revenue-collection initiative.

In the internal document, PeaceHealth managers say the Huron option — under which workers would remain employed by PeaceHealth — is "the least disruptive option, although it still represents major change and investment of resources."

Sustainability

In a separate effort, PeaceHealth is advancing "sustainability" initiatives at its Vancouver hospital, including raising productivity and reducing costs, according to officials.

Joe Ness, senior vice president for operations at PeaceHealth Southwest Medical Center, estimated the hospital has so far achieved $70 million in financial savings and efficiency improvements. "So far, we've been able to avoid widespread, deep layoffs," he said.

Ness said PeaceHealth Southwest, like so many other hospitals across the U.S., is under pressure to control costs. One of those pressures has come from Legacy Salmon Creek Medical Center, he said, which has eaten into PeaceHealth Southwest's market share.

As part of its efforts to control costs, boost efficiencies and broaden its access to capital markets, the Catholic-sponsored PeaceHealth is pursuing a partnership with Englewood, Colo.-based Catholic Health Initiatives.

The venture would combine seven CHI hospitals in Washington and Oregon with nine PeaceHealth hospitals in Washington, Oregon and Alaska. The new organization would have revenues of nearly $4 billion, nearly 26,000 employees and about 950 employed physicians.

Aaron Corvin: http://twitter.com/col_econ;http://on.fb.me/AaronCorvin; 360-735-4518; aaron.corvin@columbian.com.