SUTTER HEALTH: Tightening Belt To Prevent $35 Million Budget ‘Gap’
Sutter Health plans to cut $35 million from its budget by 2003, the Sacramento Business Journal reports. Sutter's Central Area posted net income of $23.2 million on revenue of $674 million last year, but $7 million of the profit was "wiped out by one-time charges." Sutter is "still mum about this year's numbers." As part of the belt-tightening, Sutter plans to eliminate 70 jobs in the Sacramento area, charge HMOs more money for care and make small cuts in various operations. Hoping to mimic its success earlier this year in negotiating higher rates with Blue Cross, Sutter will target other health plans. "We are now communicating with all our other health plans regarding a need for higher premiums in order to remain successful," said Sutter Central interim CEO Elizabeth Shih. The Business Journal reports that Sutter has been hurt financially this year from falling investment income, "costly earthquake safety retrofits, Year 2000 computer fixes and decreased Medicare reimbursements." If Sutter does not make the $35 million in cuts, Shih said her company would face a budget "gap." She said, "We are trying to be proactive. We have to look, not just at one year at a time, but three to five years out, to where we want to be at that time" (Robertson, 11/9 issue).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.