Minnesota's HealthPartners has announced plans to cut about 445 jobs in various parts of the organization as the health plan and health system responds to declining Medicare reimbursement and other issues.
The Bloomington, Minn.-based organization on Thursday confirmed it will close a home care division, a move that will eliminate 70 jobs. That's on top of the not-for-profit organization's announcement in November that it will close its retail pharmacies in early 2020, taking with them another 300 positions. It also said last month it plans to cut another 75 positions in areas like information services and technology.
"We had to make difficult decisions to make sure we can continue to provide high-quality service and coverage to our patients and members," HealthPartners spokeswoman Rebecca Johnson said in an email.
Johnson blamed the decisions to close the pharmacies and home care division, Integrated Home Care, on declining Medicare reimbursement rates and the Medicare Cost transition.
Integrated Home Care provides about 32,000 home visits and related services annually.
HealthPartners will shutter 30 retail pharmacies within HealthPartners, Park Nicollet, Central Minnesota and Stillwater Medical Group clinics. It will also end its mail-order pharmacy operations. The HealthPartners retail pharmacy locations will close April 1; the rest will close Jan. 20.
One-third of the 300 pharmacy-related jobs that will be shed are pharmacists.
Despite the retail pharmacy closures, HealthPartners will retain its specialty, infusion and hospital pharmacies, in addition to its health plan pharmacy management and medication therapy management services. The health plan will continue to offer mail-order pharmacy options.
Retail pharmacies have provided convenient options for years, but preferences have changed to favor large-scale organizations able to support extended hours, drive-through pickup, and other conveniences HealthPartners can't offer, Scott Schnuckle, the organization's senior vice president of pharmacy & business development, said in a statement.
"Like others preceding us in our market, we've made the difficult decision to exit our retail pharmacy operation," he said.
HealthPartners drew $146.5 million in operating income on $7 billion in revenue in calendar 2018—a 2% operating margin—compared with $175.5 million in operating income on $6.6 billion in revenue in the prior year.
As of June 30 year-to-date, HealthPartners' operating margin had improved to 3.1%, compared with 2.5% in the prior-year period. Of the organization's revenue, 48.4% came from premiums, down from 52.5% in the prior-year period. Net health service revenue increased from 42.8% to 44% in that time.