St. Luke's Health System Announces Plans To Trim Workforce

The health system says expenses are increasing faster than the rates it is paid for its services.

Over the past three years hospitals and health systems have been forced to make the difficult choice of cutting their workforce as the financial pressures caused by the pandemic wreaked havoc on their economic well-being.

St. Luke's Health System—a Boise, Idaho-based healthcare provider—says it has come to the same arduous decision to cut its own workforce by two percent. Pent-up demand for services, workforce shortages, supply chain disruptions, and a more complicated payment environment all led to its decision to reduce its staff, the organization said in a release shared with HealthLeaders. St. Luke's President and CEO Chris Roth also said another factor contributing to the need to slash its labor is because its expenses are increasing faster than the rates the health system is paid for its services. Impacts will be primarily in non-clinical and administrative areas.

"This trend is not sustainable, and we expect significant financial and resource pressures to continue,” Roth said in the release. "We have outlined multiple response plans to help ensure our ability to deliver on our mission and advance our performance in this complex environment."

Those plans include reducing its discretionary spending and contracted services, including traveler reliance. St. Luke’s has accelerated the consolidation of real estate holdings to improve efficiency and reduce costs. It has also accelerated investments in programs that expand access to services. St. Luke’s said it has trimmed executive leadership positions and slowed hiring in non-direct patient care areas. The organization has also reprioritized and decreased its capital spending.

"The post-pandemic environment and multiple other global and national factors have created sustained headwinds across the healthcare landscape," Kate Fowler, Senior Vice President, and Chief Financial Officer for St. Luke’s Health System told HealthLeaders. "Many health systems—ours included—are being impacted by overlapping issues. These impacts will not be temporary, and we must adapt accordingly. Despite these challenges, St. Luke’s remains a strong organization, and we must ensure we remain that way for years to come – we believe our multiple response plans will help us do just that."