Becker's Hospital Review

32 CFO / FINANCE Humana Leaves AHIP: 4 Things to Know By Ayla Ellison L ouisville, Ky.-based Humana terminated its membership with America's Health Insurance Plans, which is the health insurance industry's largest trade group, according to The Hill. Here are four things to know. 1. Humana officially ended its membership with AHIP Dec. 31. However, a Humana spokesman told The Hill the insurer "has not actively participat- ed in AHIP since early 2017." 2. Humana is the third major health insurer to leave AHIP. UnitedHealth Group left in 2015, and Aet- na terminated its membership in early 2016. 3. Although some of the major insurers have left AHIP, the group is growing. AHIP added 12 new members this year and recorded a $1.2 million profit in 2016, compared to a $2.3 million loss the year pri- or, AHIP spokeswoman Kristine Grow told The Hill. 4. Humana exited AHIP amid speculation the company could be acquired by a noninsurer, ac- cording to The Hill. In December, Ana Gupte, PhD, a senior healthcare services analyst at Leer- ink Partners, told CNBC the threats posed by CVS Health's deal with Aetna might be enough to push Walmart to consider buying Humana. n California Hospital Imposes Overtime Restrictions, Hiring Freeze to Shore Up Finances By Alia Paavola V entura (Calif.) County Medical Center implemented a par- tial hiring freeze, imposed overtime restrictions and rene- gotiated staff contracts to help offset a projected deficit of at least $8.3 million, according to the Ventura County Star. Medical center officials attributed the shortfall to lower-than-antic- ipated patient volumes, a delayed opening of a $305 million, 122- bed tower at the main hospital and missed revenue projections as a result of lower reimbursements from California's Medicaid program. In December, hospital leaders froze the hiring process for employ- ees who are not directly involved with patient care and imposed a stricter policy on overtime requests, which requires employees to receive two levels of approval. Additionally, they renegotiated con- tracts, realigned staffing levels to fit with the lower number of patient admissions and hired an international consultant to analyze billings. Payroll costs have decreased about $300,000 to $400,000 in each two-week period as a result of the overtime restrictions and renegotiated contracts, according to the report. "We're not sitting around waiting for the year to end," said VCMC CEO Kim Milstein, according to the VC Star. "This is go- ing to level out." Ms. Milstein noted no medical units have been closed and no regular employees have been laid off. n Tenet's Detroit Medical Center to Eliminate Up to 300 Jobs By Ayla Ellison D etroit Medical Center plans to cut up to 300 jobs as its parent compa- ny, Dallas-based Tenet Healthcare, moves forward with its cost reduction initia- tive, a source knowledgeable about the matter told Crain's Detroit Business. Detroit Medical Center CEO Tony Tedeschi, MD, sent a memo to employees Jan. 22 out- lining the reorganization plan. He said the hospital has already eliminated 14 manage- ment positions and plans to cut additional jobs in the near future. He did not specify how many jobs would be eliminated. "Realistically, we won't be able to place every displaced associate in a new job within the company, but we will make every effort to place as many as possible," Dr. Tedeschi said. He did not specify which departments would be affected by the job cuts. ree sources familiar with the matter told Crain's Detroit Business support staff and middle managers in several clinical departments, dietary and food service workers, and nursing unit clerks will be affected by the layoffs. Dr. Tedeschi said several factors led to the changes, including admissions stagnating, patients shiing toward outpatient services, declining government reimbursement and increasing uncompensated care costs. "As a result of these local and national trends in healthcare, and the challenges they have created, Tenet Healthcare has un- dertaken companywide plans to meet these new realities head on," said Dr. Tedeschi. "And Tenet is not alone in the healthcare space, as other hospital operators are taking similar actions." Aer reporting a net loss in the third quarter of 2017, Tenet launched a $150 million en- terprisewide cost reduction initiative, which involved renegotiation of contracts with sup- pliers and vendors, as well as the elimination of about 1,300 jobs. In December, the company expanded the cost-cutting plan to $250 million, but did not disclose whether additional jobs would be cut. In a presentation to investors at the J.P. Mor- gan Healthcare Conference in San Francisco in January, Ron Rittenmeyer, executive chairman and CEO of Tenet, said 2,000 jobs, or about 2 percent of Tenet's workforce, would be elimi- nated under the cost-cutting plan. n

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