Provided by Covenant Health System
The U.S. health care system is in a significant period of transformation and the impacts of the Affordable Care Act and health care reform have resulted in reductions in reimbursement to health care providers nationwide. These dramatic changes are in turn requiring providers to reduce costs to keep services affordable for consumers while adapting services to more effectively manage the health of the community on a lower cost structure.
Reductions in reimbursement from the Affordable Care Act, sequestration cuts to Medicare funding and additional legislative reductions will result in an estimated $12.5 million decrease in reimbursements for Covenant Health not only this year but in the years to come as well. Covenant, like other health providers, faces pressure to reduce costs and accelerate the need to find ways to prepare for changing financial conditions.
Given these challenges and after careful consideration and discernment, Covenant Health informed a number of colleagues that they will be part of a reduction in staff which is one element of a comprehensive plan to lower health care costs. The 49 employees impacted represent less than one percent of Covenant Health's entire regional workforce and we anticipate the final number of affected employees will go down as we work to help them find a new position elsewhere in the ministry.
"Covenant Health is financially stable, but the changes we've experienced thus far and will continue to undergo are the direct result of reduced reimbursements and our efforts to make affordable health care services available in our community going forward," said Richard Parks, executive vice president and CEO of Covenant Health.
Covenant employs approximately 5,400 staff across the region and will attempt to find other positions for employees affected by the necessary reductions. Covenant will extend assistance to employees who cannot find open positions with the organization, including severance packages for those who qualify and outplacement services to help those displaced find new positions.
Covenant's leadership will continue to apply effective strategies to position itself for success in the new normal of health care. Covenant's faith-based mission is uniquely positioned to not only deliver quality care in these changing times but provide a mission of Christian healing to the people of west Texas and eastern New Mexico.