SALT LAKE CITY — Intermountain Healthcare said Wednesday that 2,300 of its workers will be "switching" to a new employer called R1 RCM by April 8, a move the hospital system says will save it $70 million over three years.
The affected employees all work in "nonclinical" positions, said Intermountain Healthcare spokesman Daron Cowley.
"The employees affected by the change will keep their jobs at their rate of pay but will be employed by R1," Cowley said in a news release. "These employees currently work in nonclinical positions such as registration clerks, billing specialists and scheduling staff.
"R1 is a national company that specializes in these types of services and works with several of the country’s largest not-for-profit health organizations, including nearly 300 hospitals."
Cowley said "all employees will retain a job at their current rate of pay" in the transition, and that most affected workers would stay "at their current work site."
"It’s anticipated that hundreds of additional jobs will be brought to Utah as R1 expands its operations, including an innovation and development center in the state," Cowley said.
Robert Allen, Intermountain's chief operating officer, told the Deseret News that R1 "will be offering (workers) SelectHealth coverage there as well."
Allen was also asked how employees' total employer benefits package would be affected.
"As our employees transition from here to the R1 team, they'll obviously move over to the R1 benefit structure. ... (R1) has generous benefit packages, but they're different in some cases than ours," he responded, without going into greater detail.
Allen added that transitioning employees' job tenure at Intermountain will be credited to them at R1.
On Tuesday, Intermountain Healthcare also finalized an agreement to purchase $20 million in R1 equity. R1's total shares hold a market value of more than $504 million, according to the Nasdaq stock exchange. As part of the agreement, Intermountain is granted one seat on R1's board of directors.
That seat "allows us to ensure ongoing alignment ... and make sure this (transition) is happening the way we envision it," Allen told the Deseret News.
Allen said the $70 million the hospital system projects in savings over three years will occur because R1 is "able to bring economies of scale."
“We owe it to the patients and communities we serve to explore and implement options such as this to help address this issue of affordability,” Allen said.
Intermountain announced in October that it would reorganize its reporting structure away from "geographically defined administrative regions."
Intermountain CEO Dr. Marc Harrison told the Deseret News and KSL editorial boards in November that the organization was in the midst of changes designed "to disrupt ourselves … to make things more affordable."
Harrison was asked at the time whether Intermountain might undergo any additional shifts that could impact employees, particularly those in nonclinical positions.
"We will look at any number of options for any given area, and some of them will be best served internally, and some of them may not be," Harrison said then.
One Intermountain employee who wished to have their name withheld for this story said Wednesday that there are worries the organization is "continuing to outsource or look at outsourcing virtually all major departments."
"The employee morale is at an all-time low," the source said, adding that they personally believe the changes are compromising the quality of care that Intermountain provides.
Allen said Wednesday the changes are being done with sensitivity toward employees.
“The employees affected by this change are being well cared for,” Allen said in a statement. “We’ve made every effort to ensure their jobs and incomes are secure, while at the same time balancing the need to make changes that benefit our patients and communities."
Asked whether there would be additional outsourcing or other major changes at Intermountain Healthcare going forward, Allen said "there (are) no other decisions that have been made on this front."
Responding to the source's concerns about thinning out staff too much, Allen said "as we look at our staffing levels at Intermountain Healthcare, we're very interested in looking at having the right staffing, but also looking at having the right efficiencies."
Another Intermountain employee, who wished only to be identified as an eligibility counselor who helps patients with insurance issues, said they were upset with the way the announcement was handed down to employees.
"The email was very vague. (The) majority of us feel so betrayed and unappreciated. One of Intermountain's 'healing commitments' is 'I keep you informed and involved.' They failed to do that. ... A lot of us are angry," the source told the Deseret News.35 comments on this story
Allen reiterated that "our desire is to support our caregivers and help them through that (transition)," though he conceded that for some, "it's a bit of a shock to the system, a bit of a change (that) they've got to absorb ... and process."
He stressed that the jobs available at R1 are guaranteed for them on a "one-to-one" basis, adding "it's not an issue of ... a narrowing of that pool."
Intermountain Healthcare is Utah's largest employer, presently with about 39,000 employees, and operates 22 hospitals and 180 clinics.