RACINE COUNTY — Partly in response to the Affordable Care Act, or Obamacare — as well as other forces — Aurora Health Care expects $13 million less in government reimbursements this year and has begun cutting some positions.
Earlier this month Aurora President and CEO Dr. Nick Turkal laid out the financial situation in a 1,020-word letter to all system employees. He warned of position eliminations and discontinuations to come.
Turkal said there are several causes of the projected $13 million or more decline in reimbursements. He cited the economy, cost reductions dictated by the Affordable Care Act and the congressional “fiscal cliff” agreement.
“We will need to take immediate actions in our 2013 budget to compensate for this loss in revenue,” Turkal wrote.
Actions to reduce fixed costs will be taken this quarter, Turkal wrote. He also added that “you will hear of some position eliminations plus discontinuation of some positions in the coming weeks.”
Aurora spokeswoman Myrle Croasdale said Thursday Aurora has had a hiring freeze for most open positions — mostly in administration — in the past quarter. Public affairs, for example, has lost some positions.
The number of jobs lost will be small in relation to Aurora’s approximately 30,000 employees, Croasdale said. “We anticipate that will be a small number and sprinkled throughout the year.”
But she confirmed both occupied and vacant positions will be cut.
“We don’t want people to be afraid, but things are different,” Croasdale said. “Some positions will be eliminated.”
Aurora is also taking smaller steps, she said, such as keeping appropriate inventory levels of supplies, and encouraging employees to make black-and-white photocopies instead of color whenever possible, because the former costs a fraction of a color copy.
Aurora’s situation could become much more dire, Turkal wrote. He said one proposal under consideration but not yet decided is a 27 percent cut in physician payments for Medicare services. That would cost Aurora roughly $78 million a year.
Also, if congressional inaction leads to “sequestration,” that would lead to automatic budget cuts that would cost Aurora another $23 million, Turkal wrote.
In his summary paragraph, he wrote, “I am as frustrated by this as anyone. While most of these changes were brought on by external forces, it remains our responsibility to figure out how to continue to provide the very best care for our patients and to help them live well.”