St. Vincent Health will lay off an unspecified number of employees across its 22-hospital network by June 30 in a cost-saving move the hospital blamed on Obamacare, cuts to Medicare reimbursement, and lower-than-expected volumes of patient procedures.
Indianapolis-based St. Vincent, which is the second-largest hospital system in Indiana, employs nearly 18,000 workers. The Catholic organization is the sixth-largest employer in the state.
“We understand that other health systems are facing similar challenges and making difficult decisions as well,” said Vince Caponi, CEO of St. Vincent Health, in a prepared statement. “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.”
St. Vincent spokesman Johnny Smith on Thursday declined to give an estimate of the number of people who will lose their jobs in the restructuring, saying St. Vincent executives had more work to do to discern which positions to eliminate. He said the job losses would be among both permanent workers and contract employees.
He also said St. Vincent will be looking for expense reductions in its administrative functions, supply purchasing, and programs and services. He said he could not provide specific examples at this time.
“We want to make sure, any reductions that we have, that we continue to provide excellent patient care,” he said.
Indeed, St. Vincent is not the only local hospital system looking to cut costs. Indiana University Health, the state’s largest hospital system, earlier this year delayed plans to expand its Methodist Hospital in downtown Indianapolis.
Also, IU Health CEO Dan Evans has said the hospital system intends to cut $1 billion—or more than 20 percent of its expenses—over the next four years, which would likely include staff reductions.
“I believe that, as an industry, we have been inefficient,” Evans said in March.
Also, Community Health Network has cut out more than $100 million in annual expenses since 2009. It hopes to trim out a total of $300 million by 2015.
The 2010 Patient Protection and Affordable Care Act, aka Obamacare, called for $155 billion in cuts to hospitals’ Medicare payments over 10 years. Then the fiscal-cliff deal on Jan. 1 this year chopped out another $15 billion. And the budget sequester, which hit March 1, looked ready to sap another $10 billion.
Smith said he did not have a specific dollar amount of expense reductions that St. Vincent is aiming for.
In the 12 months ended June 30, St. Vincent had total revenue from operations of $2.3 billion. Its income from operations totaled $158 million.