A new partnership with management services company R1 RCM is expected to save Sutter Health $400 million over the next 10 years.
R1 announced in a Thursday news release that the company entered a 10-year commitment to serve as the exclusive provider of enterprise revenue cycle management services for Sutter Health. R1 will integrate its technology into the Sutter system and introduce “additional efficiencies” intended to reduce Sutter’s operational costs.
As part of the agreement, about 1,150 Sutter revenue cycle employees in non-clinical roles will be offered positions with comparable pay and benefits with R1. According to the release, jobs in California are expected to remain in the state and will give many employees additional opportunities to advance their careers.
“The R1 partnership helps strengthen Sutter’s long-term financial health and our ability to continually reinvest in our patients, communities and integrated network,” Sutter Shared Services CEO Jeremy Eaves said. “We have been part of the fabric of Northern California for a century and remain committed to delivering on our mission to provide high-quality care to our patients and communities for years to come.”
Based in Sacramento, Sutter’s current not-for-profit network of clinicians serves more than 3 million Californians in 22 Northern California counties. In choosing R1 to manage its revenue cycle, the organization joins healthcare systems including Intermountain Healthcare, Penn State Health and Village MD.
R1 is a provider of technology-driven solutions intended to complement the existing infrastructure of healthcare organizations, according to the release, introducing improvements to reduce operating costs and improve the patient experience.
Over the next 10 years, R1 hopes to save the organization $400 million, helping Sutter “achieve more sustainable labor costs and address rising inflation,” according to the release.
“Partnering with organizations like R1 is a highly viable strategy that hospitals and health systems are increasingly using to address rising costs,” R1 CEO Joe Flanagan said. “We look forward to helping Sutter deliver on their mission of providing accessible and inclusive care to the more than three million Californians they serve.”