The holiday season could be a happy one for a vast majority of SSM Health’s employees across the health system’s four-state footprint.
The Creve Coeur-based nonprofit health care provider says it will increase eligible employees’ salaries by 2 percent starting this November, crediting the success of a cost-cutting initiative that began last fall.
In a letter sent to employees Sept. 12, CEO Bill Thompson wrote: “We are committed to providing fair and market-competitive salaries and benefits to our employees. It is also one of the reasons we have been working so hard to achieve our budget and end the year with strong financial performance. ”
The customary annual raises were temporarily suspended for eligible employees in 2014 as the health system tried to steer its finances back to black. Employees who missed their scheduled pay raise period (for most, that would have been in May), they’ll receive a lump sum come November to make up for the lost wage hike.
SSM employs 30,000 individuals, and those eligible for the pay increase include part-time employees, clinicians, managers and executives. New hires are excluded.
The boost in take-home pay comes on the heels of SSM’s success with a $150 million cost reduction plan that was implemented late last year to improve finances heading into fiscal 2014. Last year the health system posted a $74.3 million loss.
“To state the obvious, we exceeded our plan’s goals,” said Kris Zimmer, senior vice president of finance for SSM, said of the wage increase.
Through the six months ended June 30 operating income was $82.3 million, compared with a $1.3 million operating loss during the same period last year, a financial statement shows.
A big chunk of the cost-cutting plan revolved around reducing overhead costs, which included eliminating 586 positions last October, restructuring management and reevaluating outsourced services.
One of the larger changes under the umbrella of cutting overhead costs was the decision to bring the legal team in-house. That represented a $4 million savings across its entire system throughout Illinois, Wisconsin, Missouri and Oklahoma this year alone, Zimmer said payday loan lenders.
Locally, bringing legal in-house meant Greensfelder, Hemker & Gale lost some of its business with SSM. Greensfelder spokesman Steve Houston said no jobs were cut as a result of SSM’s move. Zimmer said SSM will use Greensfelder on an as-needed basis for “highly specialized” cases.
Other gains were made by improving the way payments are collected, which Zimmer said stemmed from better documentation of the care that was provided to improve reimbursement from payers like federal and state governments.
The health system is also working to better predict staffing needs to reduce overtime pay. And the health system is working to better align the physician practices they’ve acquired over the years, a move that helps cut costs as those independent businesses can utilize the economies of scale the health system has to offer.
Earlier this month, the Post-Dispatch reported the health system had decided to change its name to SSM Health; dropping the “care” from its name. Currently, the entire system has more than 100 names, logos and brands. Rolling out one name and one logo for the entire system will eventually reduce marketing costs, Zimmer said.
A online cash advance is a service provided by most credit card and charge card issuers.