Intermountain to outsource 2,300 employees

Salt Lake City-based Intermountain Healthcare will outsource 2,300 non-clinical employees to the revenue-cycle management company R1 RCM, a move that is expected to save the integrated health system $70 million over the next three years, the organization announced Wednesday.

The transition is part of a new 10-year partnership that will shift claims and payment management responsibilities along with nearly 6% of Intermountain's workforce to Chicago-based R1 RCM. Intermountain has been working with R1 RCM since 2011.

The affected registration clerks, billing specialists, scheduling staff and other administrative workers will keep their jobs at their rate of pay but will be employed by R1 beginning in April, Intermountain said in a news release. In most cases, employees will continue to work at their current location, the organization said. Intermountain currently has 39,000 employees at 22 hospitals and 180 clinics located primarily in Utah.

Healthcare providers across the country are looking to shed ancillary business segments amid softening inpatient admissions, lower reimbursement levels and rising labor, compliance and pharmaceutical costs. Shifting these employees to a large employer that specializes in these services will help slow the rise of medical costs, Intermountain Chief Operating Officer Robert Allen said in a news release.

"That's money we won't have to ask our patients for," said Allen, adding that new jobs will be coming to Utah.

As part of the agreement, R1 and Intermountain will create a revenue-cycle management product development and technology center in Salt Lake City, which will bring hundreds of new jobs, Intermountain said. Intermountain currently has a regional focus for revenue-cycle management operations and consolidating them into a fully integrated model across its inpatient and preventive-care settings will help reduce costs while optimizing operational efficiency and quality, executives said.

"As we look toward providing the highest value at the lowest cost, transitioning our revenue cycle operations to R1 is a critical part of this evolution," Intermountain Chief Financial Officer Bert Zimmerli said in a news release. "R1 has proven the value it delivers to the business side of what we do, and the continuous advancements in the company's services and technology allow us to expand our relationship with them."

Intermountain, Ascension, SSM Health and Trinity Health announced last week that they are working with the U.S. Veterans Affairs Department to create a generic-drug company. While the ultimate impact is uncertain, they look to combat the unexpected price hikes of long-standing generic drugs and mitigate shortages by creating a more reliable supply.

Intermountain is also reorganizing its management framework, replacing its geographically defined administrative regions with a systemwide structure made up of community-care and specialty-care divisions to streamline communication, improve care and cut costs, executives said.