St. Luke's in Boise cutting costs due to $65 million revenue decline

adutton@idahostatesman.comFebruary 12, 2014 

St. Luke's Hospital in Boise

FILE PHOTO

St. Luke's Health System, the Boise-based network of hospitals and clinics, started the fiscal year in October with a $65 million revenue decline in its sights.

"We're behind where we want to be," spokesman Ken Dey said in a recent interview. "We're not in the hole, per se."

As a result, he said, the hospital is cutting costs. That includes leaving some job vacancies open, he said, adding that "we're still hiring for immediate" staffing needs.

The drop in revenues and need for spending cuts isn't because of a year-long legal battle over St. Luke's purchase of Saltzer Medical Group in Nampa, Dey said. A federal judge last month ruled the purchase was anticompetitive and ordered it to be undone. St. Luke's is expected to appeal that ruling.

St. Luke's CEO David Pate said before the trial began last fall that the lawsuit was costing millions of dollars. However, Dey said there are no indications at this point that the system's insurance policy won't cover the legal costs.

Revenues have been short of expectations because of other factors, such as a "very mild flu season," Dey said.

Dey added in an email Tuesday:

"We want to make it clear that this decline doesn't surprise us, and it shows that we are starting to see some success in our efforts to transition care [from] the fee-for-service to pay-for-value model. ... Going forward we expect that this will be the new normal as we continue to make that transition. I would add that the employees and departments at St. Luke's have been really stepping up and identifying areas where we can reduce waste and cut costs."

Audrey Dutton: 377-6448, @IDS_Audrey

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