Group Health Cooperative is telling its employees to expect a fresh round of economy measures as the health maintenance organization looks for ways to pare $250 million in costs over the next 16 months.
Those adjustments may include some layoffs, Group Health told employees in a companywide memo last week.
As part of the restructuring, Richard Magnuson, executive vice president and chief financial officer, is resigning, the memo also announced.
The savings and restructuring won’t mean Group Health will halt patient care enhancements in the South Sound, said a Group Health spokesman Wednesday.
“Group Health is investing in the South Sound,” said spokesman Mike Foley. “We will have an open house for our new 24-hour urgent care facility in Tacoma the first week in October. And we are opening a new Puyallup Medical Center in December.
“We announced a new collaboration agreement with Franciscan Health System a couple of months ago,” noted Foley.
In Friday’s memo to employees, Chief Executive Scott Armstrong said Group Health’s financial results have declined for the third year in a row.
The HMO had hoped that new initiatives it has undertaken would reduce the need for members to undergo expensive hospital procedures, but the new programs haven’t produced the savings he had expected.
Group Health contracts with hospitals to provide inpatient care, and those hospitals’ charges are continuing to rise.
Group Health isn’t the only local health care provider cutting back in anticipation of higher costs and lower reimbursements. Tacoma’s MultiCare Health System last fall said it would lay off up to 350 workers to cope with higher charity care costs and reduced reimbursement.
john.gillie@thenewstribune.com253-597-8663
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