Franciscan hospitals to eliminate 925 full-time positions

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The state’s second-largest hospital system, Franciscan Alliance, announced Wednesday that it is eliminating 925 full-time positions through a mix of layoffs, reduced hours, retirements and attrition.

The Mishawaka-based Catholic organization, which operates three hospitals in the Indianapolis area, said it is trying to cut expenses by as much as $500 million, or 20 percent. Most other hospitals around Indiana are doing the same.

To reach that goal, Franciscan will also cut benefits for its remaining 19,000 employees. Franciscan will freeze managers’ salaries next year, institute higher employee contributions for health insurance, eliminate its match of employee retirement savings, and place its more recent hires on a defined contribution retirement plan, rather than the hospital’s traditional pension.

Of the 925 positions cut, 275 will come through layoffs. Most of those employees, including 83 in the Indianapolis-area, were both notified and dismissed today, according to a Franciscan spokesman. The hospital chain is providing severance, including benefits continuation, and outplacement counseling. A few of the laid-off employees will be offered a new position or changed hours.

Franciscan CEO Kevin Leahy said the nearly 5-percent cut in staffing was forced by fewer patient visits and by the Patient Protection and Affordable Care Act, which is also called Obamacare.

“Recent trends and the new law are challenging health care providers to manage the continuum of care for patients more efficiently and effectively to ensure the same quality outcomes at reduced reimbursement levels,” Leahy said in a prepared statement. “Our challenge is to staff our campuses in line with the reduced inpatient volumes that are a byproduct of recent health care trends and the new law.”

In 2012, Franciscan’s 13 hospitals in Indiana and Illinois pulled in revenue of $2.5 billion, generating a net gain of $110 million, excluding a special accounting charge. However, the hospital chain’s operating profit margin decreased to 4.5 percent from 5.2 percent the previous year.

Franciscan ranks second in revenue among Indiana-based hospital systems, behind Indiana University Health. On Oct. 1, Indianapolis-based IU Health cut 935 positions out of its work force of 36,000, also citing fewer patient visits and stagnant reimbursement rates from health insurance plans.

In late June, Indianapolis-based St. Vincent Health cited the same factors when it announced it was laying of about 865 workers, or 5 percent of its work force.


  • SFH Jobs
    St.Francis like many have spread themselves too thin. Why did we need another fancy hospital in Carmel? There are 3 hospitals in a row in Carmel, you can't even tell they are hospitals because they all look like hotels. Why does St.Francis have to pay a consulting group millions to tell them how to run their business more effectively? Isn't that what administration is supposed to do? Bob Brody makes nearly $2million, why doesn't he give up a percent of his salary to save a job? One of our nurse aides just recently said she cant afford our insurance what is she supposed to to? She is a single mom with a 3 year old. She makes just enough to not qualify for Mcaid but our insurance would take most of her salary. Of course the aides are always the first to get cut and they need their salary the most. If Mr.Brody and other top administrators took a cut they could save some jobs. I also agree, they are using Obamacare as a scapegoat for poor managment.
  • grammar
    "businesses" Why do so many people nowadays not understand the difference between plural and possessive?
  • Non profits?
    They are not non profits. They are all now for profit business's. they have been heavily dependent upon government subsidies especially through Medicaid. Indiana has opted out of the Medicaid expansion offered by ACA. This has lost us a lot of funding to help keep these jobs. You can thank Mitch and Pence.
    • Work In the 21st Century...
      What kills me is how "Life Sciences" was what everyone was pinning growth on. All these "old" people will need care, etc... WRONG! Crazy. Tech work does not need "TONS" of workers. It's crazy. What on earth will all these highly educated ex-life sciences people do? Sports? Arts? Dog walking? Taking in washing... Wow. Just wow.
    • Whatever...
      What? They have been making the money, they have been for DECADES. IU Health is over 150 years old. This is just greed. These hospitals wanted to be UMPC (and have overreached like UMPC) and they are using the ACA as the scapegoat. Nothing more, nothing less. Medical fees need to be WAAAY cheaper now that these hospitals have cut staff. I think IU Health and other hospitals should offer medical insurance. If SAMs Club can do it, so can they. They would make money and people could afford medical care, not hard.
    • John G and RDS
      If you don't thing these hospitals are really studying and planning on what is coming down the pike you are a fool
      • It is ACA
      • Scapegoats
        Not buying it. Obamacare is being used as a scapegoat by these failing hospital systems. There are lots of losers in this whole game, but urban hospital systems stand to be one of winning parties through the increased pool of patients. Don't get me wrong, I'm not necessary pro-Obamacare. I'm just saying that you can't blame a barely implemented government program on poor management, over building, and lack of service.
      • It's on you, Obots
        I can't tell you how I know, but I do know that this is only the beginning. Employers all across Indiana will be dropping spousal coverage. Then they'll drop dependent coverage. People will stop going to the doctor. Those who voted for the absolute fiasco that is ACA are to blame. May they twist for what they have destroyed, all because they weren't adult enough to pay for their own services.
        • Big Surprise (not)
          I had a family member who was an inpatient at St. Francis Indianapolis this summer. There were so few patients on his floor at one point, that they moved those 3 patients to another floor, for 24 hours (so they could reduce staff hours). Walking down the halls, there were few patients at any time. The new Indianapolis facility is very nice, and way to expensive. The ER rooms don't look/feel like ER rooms, the inpatient rooms feel much like a hotel room. By the way - the Indianapolis campus has to run shuttles, and offer valet parking because the available parking is so bad, and remote.
        • Pretty smug remark
          I beg to differ with you. Companies DO let producers go if they are at the top of their paygrade and benefits. Especially in this economic climate. They let the most expensive employees go first and make the younger people do the equivalent of two jobs for less pay. Don't kid yourself about why you are kept because it isn't the reason you think it is that you are so valuable.
        • be fair
          Prior to starting my business my former boss gave me a suggestion. If you are going to quit don't give me two weeks notice and I'll do the same for you if I have to let you go. If you are doing your job and working hard you won't have to worry about either one. Companies do not let the producers go first
          • Mobility
            Maybe those doctors that so boldly state that "I can practice anywhere" will have see if that is really true.
          • Good time to stay well
            This would be a good time to stay well and away from hospitals. Not only will staff moral suffer but so will patient care. Most hospital staff are pressed to keep up with the workload at current staffing levels. These layoffs are short sighted.
          • why then
            Why then, have all these hospitals built nice new LUXERIOUS campuses? While it’s a no brainer to blame Obamacare, the truth also can be found in the Millions of dollars these hospitals have poured into their campuses and all the amenities they now have. I believe that no one wants to have a dreary hospital as a place to recover. But explain why a Tylenol or even soda costs as much as 52.5% more from a hospital when your in a bed, a bed that your already paying dearly for. While I want the BEST Doctor caring for me and nurse as well and don’t mind paying for their skilled care, the fact that the hospital has a latte bar or even valet parking does not seem to be a need to me. I really, REALLY think that competition drove these hospitals to be BIGGER and better then the other. It was at our expense, and thats not better service always either jsut better looking campuses. The skilled professionals haven’t received 10% raises a year and while the cost of malpractice insurance has gone up along with errors and omissions insurance has climbed, it has not gone up at the rate of yours and my medical insurance has over the past 10 years. BUT there are hospitals now that only deal with your heart or orthopedic care, and for the most part those very same Doctors practice too at another non specialty hospital. So maybe layoffs are because these hospitals need a little regulation on being too competitive in the WRONG area’s of patient care. Think about it………
          • Less write off = more rev?
            Presumably hospitals will have less charity writeoffs under ACA. Why is this a problem for them? Sounds like health insurance companies that can't decide whether ACA is good or bad (at least for their PR purposes).
          • Building boom
            Hospitals have been in a race to build & promote new facilities the past few years. No surprise it is coming to haunt them. Have to make cuts to pay for all those ads.
          • Non-profit
            @Michael LaRosa - Non-profit do make money, but that surplus is reinvested into the organization via new facilities, etc not recognized as profit. Check out some of the large Non-profit organizations you would be surprised at their annual budget.
          • What's the count?
            I think this is over 2000 jobs in the last year that have been cut from area hospitals including St. Vincent, Community, IU Health, and now Franciscan. But, no, this is just a coincidence that it's all happening in the run up to Obamacare implementation. No need to look there. Just a coincidence.
          • But they are Non-profit
            But they are a non-profit entity that pays no taxes! What is the problem with making less money as long as they aren't losing money!!!
            • Obamacare at work!!
              This is just another case of Obamacare at work. Reduced staffing levels will lead to a lower standard of care, and the remaining healthcare workers will be overworked and ticked off. Hope all you who support Obama and this policy are happy!
            • Same old malarkey
              They were notified and dismissed today. Jeez, that must have been a shock!!! And right before Thanksgiving and Christmas too. But once again this article fails to mention another large hospital that is doing the same thing and has been since 2010 - Community Hospital East. In July they laid off all of their LPN's and unit secretaries. I was laid off in 2010 after nearly 30 years of service. I received severance for 15 weeks but was months away from being able to sign up for my pension at 62. I pity the younger employees at all of these hospitals who are nowhere near 62 and have the years in to get their pensions. They are in a world of hurt. And I see where none of their CEO's have take a pay cut either. Pretty shameful!!! But they've got the money to expand and build all over the place. Who will be staffing these new off-site medical facilities???
            • SFHS jobs
              Well, unless you got fired today, you are safe. Doesn't look like there will be a lot of happy employees. I love you. me

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            1. So as I read this the one question that continues to come to me to ask is. Didn't Indiana only have a couple of exchanges for people to opt into which were very high because we really didn't want to expect the plan. So was this study done during that time and if so then I can understand these numbers. I also understand that we have now opened up for more options for hoosiers to choose from. Please correct if I'm wrong and if I'm not why was this not part of the story so that true overview could be taken away and not just parts of it to continue this negative tone against the ACA. I look forward to the clarity.

            2. It's really very simple. All forms of transportation are subsidized. All of them. Your tax money already goes toward every single form of transportation in the state. It is not a bad thing to put tax money toward mass transit. The state spends over 1,000,000,000 (yes billion) on roadway expansions and maintenance every single year. If you want to cry foul over anything cry foul over the overbuilding of highways which only serve people who can afford their own automobile.

            3. So instead of subsidizing a project with a market-driven scope, you suggest we subsidize a project that is way out of line with anything that can be economically sustainable just so we can have a better-looking skyline?

            4. Downtowner, if Cummins isn't getting expedited permitting and tax breaks to "do what they do", then I'd be happy with letting the market decide. But that isn't the case, is it?

            5. Patty, this commuter line provides a way for workers (willing to work lower wages) to get from Marion county to Hamilton county. These people are running your restaurants, hotels, hospitals, and retail stores. I don't see a lot of residents of Carmel working these jobs.