The Herald Bulletin

Morning Update

Local Business

May 23, 2013

St. Vincent says it will eliminate some employees, contract associates

INDIANAPOLIS — The St. Vincent Health network said Thursday it plans to restructure its workforce, eliminating employees and contract associates across its 22-hospital system.

There’s no word yet on how the announcement would impact St. Vincent Anderson Regional Hospital or Mercy Hospital in Elwood, which together employ 1,522, but most changes are expected to happen before June 30.

Across its 47 county-service area in central and southern Indiana, St. Vincent employs more than 16,000 associates and 3,000 physicians, making it one of the state’s largest employers.

“As we value each individual’s commitment and dedication to the Mission of  St. Vincent Health, our thoughts and prayers are with all associates and their families during this time,” said St. Vincent Health CEO, Vincent C. Caponi.

However, he added,“to sustain our health system’s service to patients and families across the state, we must re-imagine the way we provide holistic care ­— body, mind, and spirit.”

The restructure is due to recent shifts in the healthcare industry, “which have put providers across the country under increasing economic and competitive pressure,” a release said. The network cited lower-than-budgeted care volumes, reduced payments under the Affordable Care Act and decreasing reimbursement rates for government-subsidized care.

In 2011, St. Vincent Anderson received 34 cents on the dollar spent to care for Medicaid patients. For Medicare patients, the rate was 28 cents per dollar.

According to the American Hospital Association, the average profit margin is under six percent, which, for not-for-profits such as St. Vincent, is pumped back into improvements such as maintenance, keeping pace with technological advancements and meeting new government regulations.

“Ensuring our ability to make the necessary investments in facilities, equipment, technology and talent within the realities of single digit financial operating margins requires constant vigilance,” said Tom VanOsdol, president of St. Vincent Northeast Region and St. Vincent Anderson Regional Hospital. He added it also requires “disciplined resource stewardship and continuous improvement in quality, safety, service and efficiency,”

According to St. Vincent’s release, the 132-year-old health network’s leadership is weighing options and “taking the necessary steps to sustain its viability for patients and families and the state of Indiana.” How that will be achieved — whether by reducing staff, or cutting costs elsewhere — is still in discussion.

“Each health ministry is in the process of determining how best to implement these reductions,” VanOsdol said, but the overall goal is to maintain each hospital’s services in keeping with “our mission and our values and the unique needs of the communities they serve.”

Like Baylee Pulliam on Facebook and follow her on Twitter @BayleeNPulliam, or call 648-4250.

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