In Pittsburgh's fiercely competitive healthcare market, UPMC announced voluntary buyouts to reduce its labor costs.
The system—which has also cut its hospital capacity in recent months—offered 3,500 workers voluntary buyouts to “achieve cost-savings for UPMC by adjusting our workforce to meet the demands of the healthcare marketplace,” said spokeswoman Gloria Kreps.
UPMC is roughly five weeks from the June 30 end of its fiscal year, during which the system has, so far, seen slow growth in patient revenue and a drop in hospital admissions. The end of June will also mark six months since the breakup between UPMC, which owns a health plan, and Highmark, Pittsburgh's largest health insurer. Highmark owns Pittsburgh's competing health system, the Allegheny Health Network.
Officials with UPMC said early fallout from the split was “very minimal” and reported flat patient revenue in the first three months of the year. Health plan revenue, however, increased 16% compared with the same period a year ago.
Kreps said UPMC officials do not have a savings target for the buyouts. “While there is not a specific cost-cutting target, we plan to accept the majority of employees interested in volunteering for the program,” she said.
Employees who accept the buyout offer, first reported by the Pittsburgh Tribune-Review, must be at least 60 years old and have worked with UPMC for 10 years or more. Those who agree to the offer are expected to leave UPMC within three months.
UPMC employs 62,000 people.