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GREENFIELD — The president of Valley Medical Group says inflation, inadequate reimbursement in primary care and rising costs of health care were factors in layoffs at the health care center this week.
Forty-one of approximately 400 employees of the primary and specialty care center have been laid off amid financial struggles, said Dr. Paul Carlan, president and CEO of Valley Medical Group, in an emailed statement to The Republican on Thursday.
Carlan said none of the affected employees were providers, and none of the four centers — in Amherst, Easthampton, Greenfield and Northampton — will be shuttered because of the reduced staffing.
Valley Medical Group is in the process of “adjusting our workflows, utilizing technology like the portal as well new tech to automate processes, and reallocating resources to support our increased efforts to address population health and focus on better outcomes for our patients,” he said.
Financial struggles
Carlan said on the whole, primary care is facing financial pressures — something Valley Medical Group had to take into consideration for these job cuts.
In 2023, the state only spent about 6.7% of its total commercial health care dollars on primary care, according to the Massachusetts Primary Care Access, Delivery and Payment Task Force. Last month, the task force made a recommendation to the state to increase primary care spending to at least 15%, on par with other advanced nations.
Carlan said this, coupled with a loss of revenue because of insurance contracts sourced through hospitals, and the rising costs of health care have affected his organization.
“Payers are under pressure to reduce costs; unfortunately, they take administrative actions, like depreciating the reimbursements for nurse practitioners and PAs, using AI to downcode visits, and creating obstacles around prior authorizations and step therapy,” said Carlan. “These steps increase our costs without improving care or reducing the total cost of care.”
Downcoding is when insurers pay health care providers at a lower tier of reimbursement, spurring greater costs for medical practices.
The affected employees let go from the organization are receptionists, nurses, educators, administrators/managers, technicians, custodians and couriers, he said. The organization is supporting the terminated employees by providing references and connecting employees to area practices that are hiring.
“We hope there won’t be much effect on patient care,” Carlan’s statement said.