SummitStone CEO explains 75 layoffs

FORT COLLINS — Laying off 75 people was an unpopular decision but one that SummitStone Health Partners could no longer avoid.

SummitStone in Fort Collins earlier this month laid off 75 people to keep its budget in check after months of cutting millions to avoid the eventuality of losing staff, said CEO Michael Allen.

Allen said during COVID, his staff had to care for anyone seeking care. But the emergency was declared over in May 2023, and now 18 months later, Medicaid rolls in Larimer County dropped by about 30,000 people. But, Allen said, his staff didn’t turn patients away.  

“We had been treating about 13% of people who’d come and didn’t have insurance, and that went to 25%, so now one in four do not have a payer source,” Allen said. “We continued to serve them and could not drop them because it was the right thing to do.”

In a telephone interview Wednesday, Allen, having absorbed the backlash from former employees and the resulting scrutiny of an unwelcome and surprise layoff, said his group tried everything to avoid having to lay off people.
Allen said they began cutting back on everything earlier this year, knowing that they would soon be paid on a prospective payment system versus per person as they had been.

“When things were getting slim, we tried to cut a lot of operational pieces before we got to staff,” Allen said. “We cut conferences, training and travel, construction, we didn’t replace vehicles, repair the HVAC. We cut several million dollars before we had to get to personnel.”

He said Medicaid also changed its payment formula. “Essentially, we had been paid per Medicaid member, per-month, for 30 years. That’s why the enrollment numbers were so important.”

Knowing that model was changing to a more complicated system, they began cutting back, he said.

‘We thought we could make it to when we got a new payment model with rates in July,” Allen said. 

But none of it reduces the harm to people who are asked to leave to make up for the losses in the budget. In all, he said, he reduced staff by three directors, eight managers, seven supervisors, six prescribers and the rest staff. Of those cuts, he said, only 17 were clinical, and some of those worked with partner agencies where perhaps those positions could be absorbed by those agencies.

He said first, and foremost, patients are not wandering the streets without care. He said all patients are treated with a team approach, so if they happened to lose one member of that team, they still had the other members on which to rely. He said he chose the lesser evil of not stressing out his entire team about impending layoffs ahead of time.

“There are a lot of ways to do it, and it’s a lose-lose situation,” Allen said. “We chose the best way we thought possible, and we may have not gotten it all right. But we tried to be thoughtful. … I know harm was done and I’m sorry for that.”

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