Health care act to blame for St. Luke's $100M cuts?

KANSAS CITY, Mo. - St. Luke's Health System plans to cut costs by $100 million in anticipation of the recently-upheld Health Care Reform Act.

The hospital system will do this by streamlining processes, correcting inefficiencies and cutting jobs. And they'll do it by the end of 2012.

According to an internal document obtained by 41 Action News, St. Luke's is calling its big-picture initiative FOCUS 2015.

You can read the document here: http://bit.ly/LNaTl4

Dave Dillon, of the Missouri Hospital Association, answered questions about 'anticipated declining reimbursements' which St. Luke's internal documents cited as reason for the cuts.

"Make no mistake, there are significant reductions in Medicare and Medicaid payments to hospitals in the ACA (Affordable Care Act)," Dillon said.

He also explained the federal government is reducing funding to hospitals that was used to offset the cost of caring for the uninsured, called Disproportionate Share Hospital funding (DSH). Reductions start in 2014. In Missouri's 2013 fiscal year budget, Dillon says the state will receive $784 million in DSH funds.

"However, the ACA significantly expands coverage through health insurance, both commercial health insurance and through Medicaid," he said. "So what we're seeing is basically, and its not necessarily a one-to-one. but an offset in folks who have traditionally relied on hospitals but were unable to pay now being able to while these other series of cuts are going on."

St. Luke's Health System officials said in internal documents that as part of Focus 2015, they have already completed the design phase, which included 200 employees from across SLHS working on more than 30 teams. The teams were charged with identifying new, more efficient and less expensive ways to operate.

Those teams recently presented their ideas to the FOCUS 2015 steering committee, which is made up of SLHS executives and physicians. This committee plans to release more information in the near future.

Managers throughout St. Luke's received the internal document to help them answer questions from employees about the impending changes. It's typed up Q&A style. In the document, it's revealed FOCUS 2015 will:

- touch nearly every department in the health system.
- cut costs by $100 million
- change or eliminate some positions
- implement changes as quickly as possible (by the end of 2012)

Some of the information from the internal document obtained by 41 Action News was released in an employee newsletter on Thursday.

Read the newsletter here: http://bit.ly/Nd3met

Employees 41 Action News spoke with were mixed on what they knew about FOCUS 2015.

No one we spoke with would go on camera for fear of upsetting management. Some told us they feared for their jobs, some said they had heard of the cuts but not the $100 million number and others said they hadn't heard anything about the changes at all.