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Report: Scripps Health Begins Reorganization

December 29, 2017
by David Raths
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Strategy emphasizes lower costs, greater reliance on caring for patients outside of its five hospitals

In a recent interview with the San Diego Union-Tribune, Scripps Health CEO Chris Van Gorder said that a reorganization was necessary to both cut costs and re-think how the private non-for-profit health network does business.

The Union-Tribune story noted that although it has billions in the bank, Scripps Health would pursue layoffs in 2018 as part of a reorganization strategy that emphasizes lower costs and greater reliance on caring for patients outside of its five hospitals.

In a recent memo to all of the health system’s 15,000 employees and 3,000 affiliated doctors, Van Gorder said that cuts are necessary to remain competitive in a healthcare world where health insurance companies increasingly consider low prices as a main factor in contracting and patients are more often shopping around for services as deductibles increase.

Van Gorder told the Union-Tribune that Scripps missed its annual budget by $20 million last year for the first time in 15 years, providing a wake-up call.

"We've got to shift our organizational structures around to be able to deal with the new world of healthcare delivery, find ways of lowering our costs significantly,” he said. “If we don't, we will not be able to compete.”

“There will be layoffs,” Van Gorder said. “I don’t like it, but it has to be done for me to protect the organization and our ability to take care of our community into the future.”

So far, he said, there are no specifics to share on which particular jobs are most at risk.

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