Independent Health cuts 66 jobs in Western New York

“The decision to eliminate these positions is part of our continuing efforts to improve operational efficiencies, maintain our competitive advantage, and provide our members and employer groups with high-quality and high value in their health coverage,” Independent Health spokesperson Frank J. Sava said in a statement late Thursday morning.

Sava said the affected positions were in various areas across the company, which employs about 1,600 people. The eliminated positions, Sava said, were identified through a “detailed review process to carefully examine current and future operational needs of the organization and highlighted the need to focus resources where they can have the most significant impact.”

Those affected will receive outplacement services and severance packages, he said.

All three of the major local health plans reported financial losses last year, highlighting the rising cost of medical care, particularly the expense of inpatient hospitals stays and the skyrocketing prices of drugs.

Independent Health last year recorded a net loss of about $193 million on revenues of $2.3 billion. Meanwhile, the local Highmark affiliate reported a net loss of $21 million on revenues of $3.1 billion last year, while Excellus, which includes Univera, reported a net loss of $23 million on revenues of $6.6 billion.

Earlier this year, Highmark Health cut 182 jobs across its geographic footprint, which included 15 employees in Western New York. That was just 1% of Highmark’s local workforce of just under 1,600.

Each of the health plans do have hundreds of millions of dollars in state-mandated reserves, which helps to absorb the losses and maintain financial stability even in down years.

In his statement Thursday, Sava referenced the unsustainable increase in health care costs, driven mainly by the price of prescription and specialty drugs. As such, all of the major local health plans put in big rate request increases with the state this year for small group and individual plans. The state did reduce those increases in the final approved rates, which go into effect Jan. 1.

For example, Independent Health requested an increase of 27.7% in the individual market, where it has roughly 11,500 members, but the Amherst-based health plan was approved for a 24.4% increase. On the small groups, in which Independent Health lists about 52,500 members, the insurer requested an increase of 28.1%, but the state dropped that to 21.7%.

Sava noted that increasing health care costs have made it difficult for individuals and businesses to afford coverage, so Independent Health has to look for opportunities to lower administrative costs where possible.

And those efforts haven’t been limited to payroll. Independent Health this year also put one of its buildings on its Amherst campus up for sale, seeking $4.9 million for the structure at 150 Essjay Drive in Centerpointe Business Park.

“Despite the volatility of the health care industry, Independent Health remains operationally sound,” Sava said. “We will continue to seek opportunities to drive future growth and transform operations through the use of new technologies and collaborations that advance our mission to meet the health care needs of our members and this community.”