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St. Luke’s has been cutting jobs. It says it’ll be more efficient and save money

St. Luke’s says ‘value-based’ pay will work

St. Luke's executives Jeff Taylor and Dave Self talk about the benefit for a pay for value health care model.
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St. Luke's executives Jeff Taylor and Dave Self talk about the benefit for a pay for value health care model.

Idaho’s largest private employer will cut up to 100 jobs as part of a systemwide overhaul.

St. Luke’s Health System has more than 14,000 employees across the region, from Eastern Oregon to the Magic Valley and north to McCall and Ketchum. The revamp will result in less than 1 percent of those jobs being cut. Many of those cuts have already happened, a St. Luke’s official told the Statesman on Monday.

“This is not an effort to say we want to reduce X amount of our workforce or cut X amount of costs,” said Chris Roth, the system’s chief operating officer. “That said, we do expect to reduce our leadership [staff and] reduce our costs.”

Roth said he expects the reorganization to save millions of dollars a year.

The reaction from St. Luke’s employees so far has been mixed.

“People get unsettled, and there’s a variety of emotions from excited to fearful,” Roth said. “Absolutely, there is a recognition that periods like this in an organization can be unsettling ... and it will be important for us to make sure we’re listening and paying attention.”

That turbulence may last through December and January, as current employees will learn how their jobs will change or even that they’ll have to reapply for new jobs under the revamped St. Luke’s.

“We anticipate posting several hundred positions,” Roth said. “If we’re changing roles significantly in terms of scope, and it may require a different type of skill set or enhancement, we’ll typically open those positions up to internal incumbents” before hiring from outside the system, he said.

Changes so far

The overhaul is the latest step in a process of improving services and reducing health care costs, Roth said. For example, a new type of executive will oversee pieces of the system that have traditionally been in their own silos, such as clinics, hospitals and home health care.

“They are responsible for improving the health, the outcomes and reducing the cost of care across all care settings,” he said of the newly created vice president of population health role.

The hospital leaders in charge of St. Luke’s facilities in Nampa, McCall, Mountain Home, Ketchum and Jerome have been replaced as part of the restructuring.

The former site administrators’ jobs were eliminated, according to a memo St. Luke’s CEO David Pate sent out this month. In their place, chief nursing officers will take on dual roles as chief operating officers and run the hospitals.

The CNO-COOs “will be assuming interim responsibility for day-to-day operations, reporting to population health vice presidents Mike Fenello, Dave McFadyen and Dennis Mesaros,” the memo said.

Roth said the CNOs typically have masters degrees in business or public health, as well as nursing credentials.

“It’s natural for us to say, ‘Let’s combine the operational and clinical responsibilities in the hospital,’” Roth said Monday. “The majority of our workforce are nurses. In the hospital, it’s the riskiest part of our health care system. It’s the most acute, it’s high intensity, and to us it makes sense, especially now, to ask our executive leadership in the hospitals to assume that [management role] but also to have a nursing background.”

St. Luke’s operations in Boise will be an exception, Roth said, with a separate COO and CNO because of how big and complex the Boise medical center is.

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The reorganization also puts two people, a practicing doctor and an administrator, in charge of each “service line,” such as primary care, women’s health or oncology.

Why St. Luke’s is restructuring

The traditional way of paying for health care is changing, and St. Luke’s is going through “a huge transformation,” Pate said in the memo.

“It means looking at components of the health system as cost centers, instead of profit centers as they have existed under fee for service,” the memo said. “Additionally, we must move from a hospital-centric model and structure to a population health model that focuses on trying to prevent avoidable hospital admissions and emergency visits and on coordinating their care more efficiently and effectively.”

Pate’s memo said more changes are coming for St. Luke’s employees.

“Beginning this month and over the next few weeks, leaders will be meeting with team members to share information regarding the new organization design structure and any related changes for team members,” Pate wrote. “We will be moving quickly to share information, and meetings and conversations will be sequenced and will be happening through the remainder of November and the first week of December. We anticipate the majority of adjustments will be complete by the end of January, and refining and fine-tuning our new structures will continue through the spring.”

The site administrators who were laid off can apply for new jobs in the organization, a St. Luke’s spokewoman said.

St. Luke’s Nampa’s former administrator, Ed Castledine, left the health system earlier this month, according to the spokeswoman. Castledine took a job at Boise businessman Tommy Ahlquist’s company, BVA Development, she said.

Some of the administrators were fairly new to their jobs. The Mountain Home administrator started in May 2015. Castledine was promoted to administrator in 2015 as well. McCall’s administrator started in March 2016.

Roth said St. Luke’s has tried to be “as transparent about this effort as possible.”

He said employees were able to ask questions during webinars in October.

Here’s what he heard: “Everything from concern, to fear, to excitement, to this is the right direction to go and I’m glad we’re making some of the tough decisions we need to.”

Audrey Dutton is an investigative reporter for the Statesman. Contact her at (208) 377-6448 or adutton@idahostatesman.com.

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