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Reid Health Restructuring

7/13/2023

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Wayne County Area Chamber of Commerce statement -
“The Chamber recognizes the strong need for quality healthcare in Wayne County.  We realize in a demanding and ever-changing market, organizations are adjusting their models to remain strong and viable long-term.  We plan to continue gathering information, convene important conversations, and proactively work with our local health care providers, such as Reid, to help ensure our community has the health services it needs to thrive in the coming years.”

Reid Health Press Release - 
Reid Health undergoes restructuring to bring down costs
July 11, 2023
Faced with an increasing gap between rising expenses and reduced reimbursement rates from insurance providers -- in particular Medicare Advantage and Medicaid -- Reid Health is taking steps to reduce costs and streamline efficiencies.
Recently, healthcare systems across the country have been battling a widening imbalance between rising costs related to inflation and reimbursements that haven't kept up with those costs, resulting in major financial issues unlike any Reid has dealt with in the past.
The factors at play include:

  • Reduced volumes, especially in inpatient services
  • Skyrocketing labor and supply costs driven by high inflation that exceeded 8% this year
  • Tightening reimbursement from commercial and governmental payers that isn't keeping up with rising expenses to provide care (the traditional Medicare increase was only 2% this year versus an 8%-plus inflation in Reid's costs to provide that care)
  • Continued challenges with effectively reduced payments from many Medicare Advantage programs when compared to traditional Medicare
  • Difficulty receiving timely payment from various insurance providers
"The shortfall between increasing costs and the amount we receive is growing. The current model isn't sustainable, and it's forcing us to look for ways to reduce costs and be more efficient," said Craig Kinyon, Reid Health President/CEO.
Adding to the burden is the fact that insurance companies are slow to reimburse for patients with commercial insurance after care has been delivered. In many cases, claims are even outright denied despite having prior authorization.
"Healthcare organizations across the state and nation are making difficult decisions to stay afloat in this challenging environment," said Brian Tabor, President of the Indiana Hospital Association. "I'm concerned we may see more reductions in hospital services over the coming months as Medicare and Medicaid payments continue to fall further below the cost of delivering care, exacerbating the fragile state of hospital finances.
"We need Congress to reject proposals that would impose Medicare cuts and urge the State of Indiana to provide short-term Medicaid relief to avoid this trend continuing across the state."

The Reid Health Governing Board has been working with a consultant to identify opportunities to streamline organizational operations, reduce costs, and improve efficiencies.
Over the past few weeks, Reid has taken steps to reduce duplication and costs within its executive leadership and middle management teams. Doing so allows Reid to streamline reporting structures and identify efficiencies for cost savings.
As a result, some roles are being eliminated. Affected employees have the opportunity to apply for other open positions for which they're qualified, and some have chosen to stay with Reid.
In addition, Reid will close the Reid Employee Wellness, Sports Performance, and Massage Therapy departments along with the HealthWorks Fitness Center in Connersville. HealthWorks will close on July 31.
The same factors affecting Reid's finances are impacting other health systems across the country, including here in Indiana. For example, Ascension St. Vincent recently closed a hospital in Bedford as well as 11 primary care and other centers across Central Indiana.
"These are the kinds of tough conversations families have around the kitchen table during hard times," Kinyon said. "When your income is reduced while your expenses increase, changes must occur. That's the situation we're in today.​

"This process to better align our costs and resources will ensure we can continue to provide exceptional care for those we serve. We remain committed to our mission to lead our communities to well-being, one person at a time."


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Wayne County Area Chamber of Commerce.  All Rights Reserved.
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