Intermountain Healthcare moving 2,300 workers to management partner

Salt Lake City-based Intermountain Healthcare announced Jan. 24 that it would transfer roughly 2,300 employees to a new employer, saving the institution roughly $70 million over the next three years. The affected employees all work in “nonclinical” positions, said Intermountain Healthcare spokesman Daron Cowley.

The 2,300 individuals will become employees of R1 RCM, a Chicago-based revenue cycle management services provider. The transition will be effective in April. Intermountain and R1 RCM initially partnered in 2011 and Intermountain has employed R1 employees at several of its facilities for the past six years.

“Everyone recognizes the cost of healthcare in the U.S. is too high,” said Robert Allen, Intermountain Health’s chief operating officer. “We owe it to the patients and communities we serve to explore and implement options such as this to help address this issue of affordability.” Allen added that the expected $70 million in savings during the next three years is “money we won’t have to ask our patients for. Plus, new jobs will be coming to Utah that will help strengthen the economy.”

Under the partnership, all current Intermountain employees transitioning to R1 RCM will retain jobs at their current rate of pay and employees will be able to continue working at their current work sites in most cases. The 22-hospital system revealed it planned to reorganize its operations late last year, according to the Deseret News.

“R1 is a national company that specializes in these types of services and works with several of the country’s largest not-for-profit health organizations, including nearly 300 hospitals,” said Cowley. “It’s anticipated that hundreds of additional jobs will be brought to Utah as R1 expands its operations, including an innovation and development center in the state.” 

Allen also said that R1 “will be offering SelectHealth coverage (to the workers) there as well.” As our employees transition from here to the R1 team, they’ll obviously move over to the R1 benefit structure.  (R1) has generous benefit packages, but they’re different in some cases than ours.” Allen also said that transitioning employees’ job tenure at Intermountain will be credited to them at R1.

Intermountain also recently finalized an agreement to purchase $20 million in R1 equity. R1’s total shares hold a market value of more than $504 million, according to the Nasdaq stock exchange. As part of the agreement, Intermountain is granted one seat on R1’s board of directors. That seat “allows us to ensure ongoing alignment ... and make sure this (transition) is happening the way we envision it,” Allen told the Deseret News.

Intermountain CEO Dr. Marc Harrison told the Deseret News and KSL-TV editorial boards late last year that the organization was in the midst of changes designed “to disrupt ourselves … to make things more affordable.”

Allen said the transition of the employees will bring “hundreds” of new jobs to Utah as R1 bases some of its national operations in the state. “When Intermountain was founded in 1975 through a gift to the community from The Church of Jesus Christ of Latter-day Saints, church leaders made but one request of the fledgling health system: that we should always strive to be a model not-for-profit health system, doing our very best for those we serve,” he said. “It’s a challenge we try to honor every day and it has inspired Intermountain caregivers to continually search for ways to innovate and improve.”