Banner executive: Greeley’s North Colorado Medical Center ‘will not take more than its fare share’ of cuts
May 20, 2017
About Banner Health
Banner operates 28 hospitals and several specialized facilities in six states: Arizona, California, Colorado, Nebraska, Nevada, Wyoming. In northern Colorado, Banner employs about 4,800 people.
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About Becky Kuhn
Becky Kuhn is the chief operating officer for Banner Health. In this role, she is responsible for all patient care delivery sites. She holds a bachelor’s degree in nursing from Arizona State University and a master’s degree in nursing from the University of Arizona. Kuhn is also a fellow of the American College of Healthcare Executives.
While Banner Health officials have consistently declined to say how many positions have been cut from North Colorado Medical Center in Greeley as part of a companywide restructuring, a top executive indicated the reductions would not exceed 20 positions.
Phoenix-based Banner Health, which manages NCMC, has largely completed its overhaul with changes to upper management and cuts to nearly 1 percent of the health provider's positions.
Banner Health Chief Operating Officer Becky Kuhn said recently in a telephone interview from her Arizona office the restructuring comes in the face of a massive disruption of the health care industry, which is affecting health care providers across the country. She said these factors transcend politics and the health care debate underway in Congress.
"Irrespective of what happens in Washington, we know that the current health care system, as it's designed, from both a consumer and affordability standpoint, is not sustainable," she said. "We've really taken on that mission of redesigning, re-inventing health care."
Kuhn said the disruptive factors including emerging changes in a host of health care-related areas, such as:
» Growing demands from health care consumers for more digital options when it comes to connecting with providers.
» Patients who feel pressed by unsustainable growth in out-of-pocket costs.
» A greater demand for easier and more efficient access to health care.
» Changes in Medicare and Medicaid funding.
"All of that is what is driving us today to know that we need to reposition ourselves to re-invent how health care is delivered," she said, noting Banner is not the only health care provider to face these kinds of disruptions. "I'm proud to say that we believe that Banner is ahead of the curve in terms of recognizing where the future is going. We're going to skate to where the puck is going to be. There are a number of organizations across the country that are not recognizing what's happening in the world."
In Colorado, she said, NCMC also faces the specific challenge of a $10 million cut this year in Medicaid funding thanks to a cut in the hospital provider fee. That cut came before the Legislature passed a bill at the end of this year's session to exempt the hospital provider fee from the Taxpayers Bill of Rights. That bill, which was sponsored by Sen. Jerry Sonnenberg, R-Sterling, who represents parts of Weld County, is awaiting a signature from Gov. John Hickenlooper. If it becomes law, it will prevent future cuts, but it won't restore the $10 million to NCMC.
Still, Kuhn said the bill's passage is good news for Banner.
"We're very pleased with that and have yet to really fully predict the positive impact of that, but that is a very good step in the right direction," she said.
Companywide, Banner Health employed nearly 50,000 workers as of March 31 in six states, including Colorado. The restructuring cut about 1 percent of the staff across the company, or about 500 positions.
"I think it is fair to say that NCMC will not take more than its fare share," she said, indicating that means the cuts at NCMC would not exceed 1 percent of the staff. NCMC employs about 1,960 people, which means its likely staff reductions won't be more than 20 positions. It's likely those positions largely represent management reductions. Banner Health Northern Colorado CEO Margo Karstens said in March she would work to protect front-line staff from cuts and ensure her management structure was as efficient as possible.
Still, Kuhn said she wouldn't discuss specifics about the staff restructuring at NCMC, citing what she called a need to be fair to the employees affected. She also said it was impossible to say how many employees would actually lose their jobs as a result of the restructuring because many may find new positions within Banner in growth areas.
In fact, she said, even with the restructuring Banner had added 4,099 new hires throughout the system as of May 1. Fully 10 percent of those — roughly 410 positions — came in Colorado. The majority of Banner's operations in the state are in northern Colorado.
She said they're making investments in ways to make health care more convenient and easer to access for consumers. That includes things such as tools that would give patients greater digital access to Banner Health providers. It also includes expanding the investment in telehealth services based at NCMC to help increase the availability of care in rural areas.
"We recognize that people want more convenience, easier access and more affordable services," she said. "We are working on and doing a pretty in-depth analysis of how we can create more outpatient access for those we serve. That's a specific initiative underway under Margo Karstens' leadership in the northern Colorado area."
The companywide restructuring comes in the wake of Banner's $1.2 billion acquisition in 2015 of University of Arizona Health Network, which included a 30-year affiliation with the University of Arizona College of Medicine.
In bondholder documents released earlier this year, Banner reported operating income of $157 million on revenue of $7.6 billion. That's up from 2015, when Banner reported $128 million in operating income on $6.9 billion in revenue.
However, Banner did experience problems with unprofitable insurance operations associated with the University of Arizona Health Network acquisition and the collapse of the Arizona Affordable Care Act health exchange. Additionally, newer operations in Arizona, as well as Banner Fort Collins and Banner Urgent Care, lost $102.5 million in 2016, slightly more than in 2015 when the operations lost $90.9 million, according to the documents.
"It is, I think, a fair comment that some of our performance was not where we wanted it to be at the end of last year," Kuhn said. "In all cases we are seeing significant progress, both in the academic division and more broadly, as we're making changes to help us to be more effective and efficient."
She said it's not accurate to tie the restructuring to the short-term issues, such as the University of Arizona Health acquisition.
"The work that we're doing today to re-invent ourselves, to reposition ourselves as an organization, to prepare for the future is really what is driving us today," she said.
— The Associated Press contributed to this report
Editor's note: This story has been updated to reflect a correction. Banner health operates 28 hospitals in six states. The number of hospitals was wrong in earlier versions of this story.