ST. PAUL — HealthPartners will shutter its St. Paul-based home care unit, eliminating 70 jobs by Jan. 31 — its third round of layoffs in the past six weeks.
The decision to close Integrated Home Care on St. Paul’s East Side follows the Bloomington-based health organization’s announcement in November that it will trim 30 retail pharmacy operations in Minnesota as a result of competitive pressures, letting go 300 workers.
Another 75 administrative jobs will be lost throughout its metro-wide network of hospitals and clinics.
The three rounds of cuts were attributed, in part, to declining federal reimbursement for Medicare-eligible services, as well as changes in the types of Medicare plans on the market.
Founded in 1957 as a cooperative, the nonprofit health care organization operates eight hospitals, 55 primary care clinics, 22 urgent care locations and numerous specialty practices in Minnesota and western Wisconsin.
“As we put together our 2020 budget, we had to make difficult decisions to ensure that our organization would be able to care for and serve people in a financially sustainable way,” said Ashley Burt, a HealthPartners spokeswoman. “Part of this was due to a decline in Medicare reimbursement rates and the shift away from Medicare Cost plans last year.”
SEIU Healthcare Minnesota, the labor union representing nurses, pharmacists and dozens of other job titles in the HealthPartners system, said they are still in negotiation over severance benefits for home care employees based in St. Paul.
“HealthPartners’ decision to close Integrated Home Care comes right on the heels of their decision to close all their pharmacies,” said SEIU Healthcare Minnesota executive vice president Phillip Cryan. “This is the opposite of the behavior we expect from an organization that claims to be committed to promoting health.”
This move comes down to a health system putting profits before people, Cryan added.
“Families all across Minnesota want to move forward on fixing our health care system, not backwards,” he said.
SEIU is currently negotiating a labor contract, which expires at the end of January, on behalf of more than 1,800 HealthPartners workers across 70 job classifications.
“They are proposing major, major cost shifting in terms of health care costs, for health care workers,” Cryan said. “If this doesn’t change in the next seven weeks, it’s pretty likely we’ll see a strike across the whole system in February. It’s therapists, physicians assistants, nurse practitioners — everybody.”
Citing a reduction in Medicare revenue, HealthPartners announced last month it will cut 75 jobs in administrative departments such as information technology across its network.
HealthPartners officials noted the federal government has been phasing out “Medicare Cost” health plans, a type of coverage predominantly offered in rural areas where few other plans are available from the private market.
As of Jan. 1 of this year, Medicare Cost plans were eliminated from counties where two or more Medicare Advantage plans compete.
The vast majority of impacted counties have been in Minnesota, according to industry analysts; HealthPartners had until this year been a major Medicare Cost plan provider.
In St. Paul, most Medicare recipients access benefits through Original Medicare plans, which cover hospital insurance, medical insurance and prescription drugs — known as Medicare Parts A, B and D, respectively — or through Medicare Advantage plans, which typically bundle the various parts with added services such as vision, hearing or dental.
30 pharmacies to close, 300 jobs lost
Also in November, HealthPartners announced it would close its clinic-based network of retail pharmacies by early 2020. The 30 pharmacies are located within the HealthPartners, Park Nicollet, Central Minnesota and Stillwater Medical Group clinics.
About 300 positions will be eliminated, including roughly 100 pharmacists.
In a statement at the time, Scott Schnuckle, senior vice president of pharmacy and business development, said “consumer preferences and pharmacy economics have changed … to favor large-scale organizations able to support extended hours, drive-through pickup, and other conveniences we’re not able to offer. Like others preceding us in our market, we’ve made the difficult decision to exit our retail pharmacy operation.”
The Park Nicollet, Central Minnesota and Stillwater Medical Group pharmacies will close Jan. 20. Retail pharmacy locations branded HealthPartners will close April 1.
HealthPartners will continue to operate its specialty, infusion and hospital pharmacies, as well as health plan pharmacy management and medication therapy management services. The HealthPartners health plan will still cover pharmacy benefits.