St. Vincent Health eliminating about 865 jobs in Indiana

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St. Vincent Health said late Friday afternoon that it has made cuts that will reduce its labor costs by 5 percent—a move that will eliminate about 865 jobs in the state.

St. Vincent employs about 17,300 at its 22 hospitals across Indiana. It was not clear how many workers were losing their jobs within the Indianapolis area. However, people familiar with the cuts said the reductions were heavy in the administrative ranks, and many of those jobs are on the city's north side.

The reductions are meant to save money as Obamacare and Congressional budget cuts promise to take a bite out of hospital reimbursement rates. At the same time, St. Vincent’s parent organization, St. Louis-based Ascension Health Alliance, is pushing to boost operating profit margins across its national chain of Catholic hospitals.

All hospitals are trying to cut expenses drastically, by as much as 25 percent, in order to prepare for a future they expect to be far more austere than the past. With personnel typically accounting for 60 percent of hospital expenses, staff reductions are an inevitable part of that process.

But St. Vincent’s layoff announcement is the largest single reduction to date among Indiana’s largest hospitals.

"We know the lives of many people have been affected by our decisions, and we made it a priority to treat all employed and contracted associates with kindness and respect," Vince Caponi, the outgoing CEO of St. Vincent Health, said in a statement.

"As these decisions were difficult, we are confident that our ministry will be positioned to continue to lead in the areas of quality, safety and patient experience in service to our communities across the state. We are praying for all associates and their families."

Indianapolis-based St. Vincent, which is the second-largest hospital system in Indiana, signaled the cuts were coming in May. It is the sixth-largest employer in the state.

In the 12 months ended June 30, 2012, St. Vincent had revenue from operations of $2.3 billion. Its income from operations was $158 million. It has yet to release financial results for its fiscal year, which will end Sunday.

The 2010 Patient Protection and Affordable Care Act, also known as Obamacare, called for $155 billion in cuts to hospitals’ Medicare payments over 10 years. Then the fiscal-cliff deal on Jan. 1 of this year chopped out another $15 billion. And the budget sequester, which hit March 1, looked ready to sap another $10 billion.


  • Excellent Healthcare at St. Vincent
    I have had outstanding healthcare at St. Vincent both in surgery, hospital stays, cancer treatments, and as an out-patient and owe my life to the doctors and others who cured me. I feel people are being pursuaded to go to other facilities that do the most advertising. That would be a huge mistake. Look first at the excellent quality of physicians and healthcare results. I agree with the doctor who had terrible experiences with the Community Healthcare Network - and was very disturbed with what I saw at the times I was tending to an elderly friend at Community East.
  • Age discrimination
    Many lay offs across Ascension Health Alliance were workers over 50 with pensions. Now those "terminated" cannot access their information online. And the bonuses, HUGE. Did any execs offer to lower their salary or bosue to help the cause. Of course not. Hurt the great people who give the excellent care in order to profit for themselves.
  • salaries
    If you think it's so easy running a hospital I suggest you apply for one of those lucrative positions yourself. Or perhaps you don't have one or more master's degrees and 15 or 20 years experience running a huge organization? I am not saying that the execs are not well paid, they are, but they also have an extremely difficult job. (Hopefully nobody will show their ignorance by replying 'how hard is it to lay people off?')The entire salary and bonuses (if any) of a hospital's exec staff would not cover a small fraction of the people who were laid off. Healthcare was affordable and we did not have these problems until the government started 'giving away' healthcare. The real farce is that government makes all these demands for cost reduction and service improvement while they themselves squander tax money like crazy and borrow as much more as they possibly can. If govt held itself to what it demands of healthcare, they could cut all our taxes 50% and still pay off the deficit.
  • dysfunctional?
    You think our healthcare system is dysfunctional? Then you've never had a family member be told they have to wait six months to begin treatments for cancer or a hip replacement, or many weeks for a heart operation. We have an excellent healthcare system. It used to be affordable too, until the government started giving healthcare away.
  • The fish rots from the head down.
    Please don't blame Obama for layoffs. Check the salaries of the CEO and management team. Most had BONUSES that would support the salaries of someone who was laid off. Don't believe me...check guidestar.org and read the 990 tax returns yourself. The Lord will provide....and it provides well as long as you are not a line worker.
  • Amen
    We have the most dysfunctional health care system in the world
  • Dumb
    St. V's is a non profit. Although their nickname is, "The sisters of perpetual profit"
  • Businesses are the to make money. Duh.
    Businesses are in business to make money. Those of you who don't understand that likely voted for Obama,
    • Melinda Carroll - HUH??
      Melinda, Obamacare raises the taxes on, among other things, medical devices, which hospitals use; has raised the insurance premiums by 100%-400%, which further reduces access and affects a hospital's bottom line; and didn't fix the reimbursement problem which led to health care problem in the first place. The mandate means also that the hospital system saves $2 million by laying off 900 people. Saying Obamacare has nothing to do with the layoffs is simply wrong, bordering on disingenuous.
    • Incorrect
      Absolutely not true. Not sure who you talked to at your local private hospital but Obamacare has zero to do with this. I am a hospital administrator for a not-for-profit hospital and have been for 22 years.
      • MD'sPerspective
        I worked for Community Health Network, and all of the nasty and unethical tactics they tried on me would make your bones quake. CHN is buying practices like crazy to get incentive money and corner the market. I can tell you right now, they tried to ruin me. CHN lied to me, did financially faulty schemes, partnered with firms overcharging my buisness and hired away my staff to harm me so they could offer me $26K a year. They will get what they deserve. It took me 1 year to realise that CHN had a "subaccount" literally stealing my money. I can tell you from experience the big hospital systems are big business offering little healthcare. We physicians are CRAZY to have let happen what has happened to the ART (not business) of medicine. the ONLY essential ingredients in the WHOLE healthcare system are providers and patients. patients can pay cash-we don't need insurance companies or hospitals run by businessmen and women. what a wreck. Don't blame Obamacare. This fiasco started a long time ago. WAKE UP DOCTORS AND UNITE.
        • hospital layoffs
          I have talked with someone from our local private hospital. The problem is that Obamacare is pitting the private against the government funded hospitals. They are giving the contracts for the people that have signed up for one of the government funded plans to the government funded hospitals. That means private hospitals will get none of that business. And if more and more sign up for them, they will put the private hospitals out of business. What idiocy do we have that we allow the government to grow like a cancer, and take over all our private healthcare with the swoop of the pen.
          • looming disaster
            Obamacare is a disaster. What will it take for America to wake up?
          • High reimbursement
            Look how orthopedic facilities have expanded the past few years. I would guess a pretty high percentage of their income is from Medicare (hip/knee replacements). Could it be possible that this is an area that has been generously reimbursed in the past, and is now due for a dose of reality?
            • Gettin' religion
              I guess after waiting for the 43rd vote to repeal the ACA to fail yet again, the CEO's finally decided some needed cost-cutting was in order. And while I realize any first-year business major could tell you labor is usually your biggest expense, and thus a normal starting place to cut, I wonder if any of these executives intend to cut back on acquiring hospitals and doctor practices,trying to monopolize specialties like rehab, and spending millions on advertising (yes, I know IU has a great sports medicine business, and Community is affiliated with MD Anderson). BTW, the not-for profits which have already "suffered" through some Medicare cuts, and the burden of charity care, still managed to scrape out small profits last year (St. V $150+ million, IU 400+ million). Boo-hoo.
              • PPACA
                To say don't blame Obamacare is rediculous. If we called it PPACA would that offend you less? It is not just the profitable corporations suffering. Schools are cutting people, small companies are going under and an entire County in Indiana cut hours across the board on its part time workers.
                • Should have known
                  With significant piece of legislation such as this it inevitably has an impact on business. For an employer, that did not offer healthcare benefits previously, they will now have to for employees that work 30 hours or more. For a small employer they either have to eat it, raise prices or make any adjustments available to then including reducing workers hours. To think that this is not the same as an additional tax to small business, I would respectfully disagree. This will make it harder to maitain a successful small business and emply people in the first place. You are probably correct that the lines between healthcare systems and insurers will start to blur. Insurers, who are publicly traded spend a lot to market, pay their executives even more than hospital and are expected to generate a return to shareholders. For this, they provide administrative services, such as claims payment, and some financing, they are the least important piece of the healthcare system. If the public wants healthcare at a lower cost, changes have to happen including an impact to the workforce, if there is a way to avoid this and still achieve the goal any ideas would be welcome.
                • Stop Trying to Be UPMC!
                  This is not Obamacare. Obamacare is every corporations "easy out" for getting rid of high priced workers. Just look around, EVERY firm is using Obamacare as an excuse. This is the result of many American hospitals "trying" to be the next UPMC (University of Pittsburgh Medical Center). Read this - UPMC revenue rises by $1 billion - http://goo.gl/ksAEh IU Health was/is trying to do this. That's why they re-branded from "clarian health" to "IU Health." This was/is a BIG trend for hospitals. Imho, St. Vincent was trying to keep up with the Joneses, and just could not keep up. Did they not know Obamacare was coming? I'm pretty sure Obamacare was mentioned a few times since 2009. Is St. Vincent getting rid of the cheap workers? Nah, probably just the expensive ones, lol. These corporations/firms should send Obama a bonus for giving them a scapegoat. Everything is Obama's fault. Not these corporations poor planning, or greed, or lack of fairness, or poor products or services, or lack of innovation, or etc... LOL! Get a clue people, it's not Bush or Obama, or the boogeyman. Corporations are just lazy and coddled. They need bailouts or government contracts to be profitable. If they can get either of these (bailouts or government contracts) they just use pink-slips to "generate" profits via cost cutting. Those workers left are forced to do more work with less pay. and when that does not work these firms go "22-22-22." They look to hire 22 year olds, work them 22 hours a day and pay them 22K per year, lol. Sad but true. - http://goo.gl/IOlHm -
                  • Collateral Damage
                    Don't forget the wide-reaching effect those 865++ job losses will create. Vendors who work with the hospitals are also cutting jobs (mine included), unemployed people can't afford to buy as many things, so that hits other industries as well, etc.
                  • What is the answer?
                    Don't necessarily disagree with some of the points but need some clarification. What is an appropriate amount of money for a hospital CEO to make? In the relative scheme of things it is irrelivant, running a health system and coordinating with hundreds of physician is not an easy task, you can't operate a hospital by committee. What do those who have made comments think is appropriate or how should we determine what is fair? As it relates to the impact of the ACA, yes in fact healthcare providers will get paid now for the 7% to 10% of patients who previously had no insurance coverage. However, the reimbursement is projected to be much less than what they receive from commercial payers and possibly even less than Medicare. Over time, current commercial business will shift to the lower reimbursed Exchange plans so yes indeed, overall providers over time will receive less money for the care they provide. Maybe that is appropriate but it costs money to provide the type of access to care we receive today. If in the future a person has to wait a couple of months to get a CT or MRI, or say six months to a year to have hip surgery is that OK? Given the continuong growth in Medicare due to the aging population, the expansion of Medicaid and the introduction of Exchanges, we are moving in the direction of nationalized healthcare. Maybe that is the way it should be but during the Clinton era someone made the observation that if the government does take over healthcare it will reflect Pentagon type costs, the efficiency of the post office and the compassion of the IRS.
                  • Win for Obamacare
                    This is a proof that Obamacare is doing what is intended to do all long - bending the cost curve, and reducing the long term healthcare costs. If you want to pay less for healthcare, the cuts have to happen. I expect to see more downward pressure on doctors pay as well. I don't understand why so many people misinterpreted this article as a criticism of Obamacare.
                  • Who has better heatlhcare than US.
                    We have great healthcare in the country and sometimes as in all businesses there has to be a balancing. Historically, businesses expand and contract. It's been happening for for thousands of years. Does anyone like it...no...but show me a better system. People running businesses are not soothsayers, there is no crystal ball. They often pass the mark they're trying to hit between good customer care and wasting money. I'm amazed that in the comments so often people make reference to the "rich people or fat cats or whatever"...as if they don't earn their money or work at their jobs. Sorry, that they are smarter, more ambitious and better educated than the great unwashed, and are compensated for it. What a attitude of entitlement we've created in this country. It used to be people looked up to the successful, wanted to emulate them and saw they could increase their piece of the pie. No longer is that the case. People want to wish for things they don't earn and have someone else earn it for them. The Chinese have figured this out and that's why they're beating us to a pulp in competitive markets. Everyone loses when there is class warfare...the rich get poorer and the poor get poorer, only government bureaucrats prosper. Just a little reminder that in the USA 90% of our millionaires are first generation. For those who cannot figure that out it means that they earned their million (in spite of taxation) and didn't inherit it.
                  • mm
                    Not so Erik I know of someone who has worked for St. Vincents as a nurse for 25 years and her hours are being cut along with many others and she said it is due to your beloved Obama's healthcare quackery.
                  • Business
                    Umm - a hospital is a business after all, and if the don't prepare for the upcoming cuts they won't survive. Why have so many smaller hospital been teetering on bankruptcy if the hospital business is so lucrative?
                  • What a Sh*t Article
                    This is more like a crappy press release, not an objective & informative article that we should expect. Who is this hack "JK" Wall? He'd be better suited writing stories for a junior high paper. Pitiful! Clearly, this has absolutely nothing to do with Obamacare & everything to do with GREED. Why was there no mention of how lucrative the salaries for the execs are? Hmmm.
                    • Thanks Susan
                      Thanks Susan, for sharing your story. "I don't know how the people who run these hospitals can sleep at night." They sleep on mattresses full of money, apparently.
                    • On target
                      Ditto to all of the above. Overexpansion, increased profitability and blaming a yet to happen reimbursement change. How would this been explained if they couldn't lay it at the doorstep of helath care reform? Maybe climate change???
                    • On target
                      I add my ditto to 90% of the previous comments: Overexpansion, demand for greater profitability and blaming somethi9ng that has not come into effect. Quite convenient!
                    • Just an excuse
                      The "Obamacare" excuse is just that, an excuse to lay employees off. These hospitals in Indianapolis like St V and Community Hospital East (part of Community Health Network) expanded and expanded while laying off people and paying out huge sums to their various CEO's and Presidents. This is justified but laying off someone after 30 years of service just before retirement is unforgiveable. I know because it happened to me at Community Hospital East and 600 to 800 others in 2010 and it is still happening. I don't know how the people who run these hospitals can sleep at night.
                      • Huh! Why?
                        You musy have voted for the President in office! This HC act is going to be a disaster for employers and us consumers...
                      • Big Picture
                        redson's comments are right on target. The hospitals, big pharma, and device and equipment makers have made out like bandits for the past 20 years. Additionally, at least 10% of our health dollar has gone to private insurers, to process or deny claims, and report record profits. Besides consumers who pay for care mostly out of pocket, the one's getting screwed the most are the doctors.
                      • Trash
                        What a trashy article by the IBJ. I expect more from this paper.
                        • Non Profit?
                          If a non-profit such as St Vincent is worried about increasing it's operating margins on revenues of $2.3B, there is no good reason why they can't pay taxes or Payments in Lieu of Taxes. Operating margins of $158M and yet they're too strapped to pay even a 1M in local taxes? I'm sure they have a large G&A, but there is no earthly reason why they don't pay some type of local tax. In this case, our convoluted non-profit status is doing nothing but subsidizing the Catholic Church.
                        • WSJ
                          "At the same time, St. Vincent’s parent organization, St. Louis-based Ascension Health Alliance, is pushing to boost operating profit margins across its national chain of Catholic hospitals." I worked at the St Vincent 86th Street campus when the Wall Street Journal ran an article quoting (arguably cynical) financial analysts as referring to the Daughters of Charity as the Daughters of Currency. The nuns would simply reply "No money, no mission." Not sure what the mission is these days, except perhaps expanding like mad in affluent northern suburbs.
                        • Blame game
                          Let's see, more people will have insurance (meaning less writeoffs) under Obamacare, but somehow this is a bad thing for hospitals? Couldn't be the overexpansion. No, much easier to join the 'blame Obamacare' bandwagon. People will believe it, and the media will not question it.
                        • Good Point Terry
                          We should start referring to the legislation by it's true legal name rather than dumbing it down with partisan language. A reputable news organization would at the very least first reference the law by it's name. The foundation of journalism is the use of AP Style when reporting, which this article certainly does not follow.
                        • Overexpansion
                          Interesting statement initially blaming Obamacare, but the next sentence states the parent company is 'pushing to increase operating profits'. Hospitals in this area have been spending money like crazy to invade each other's turf with duplication of services, and the endless advertising required to maintain their market share. Is anyone surprised this is happening?
                        • Obamacare?
                          I object to the use of that term in an "objective" news account. It's slang if not degrogatory. Why use it first and the "2010 Patient Protection and Affordable Care Act" last?
                        • prime directive: increase profit
                          "At the same time, St. Vincent’s parent organization, St. Louis-based Ascension Health Alliance, is pushing to boost operating profit margins across its national chain of Catholic hospitals." Profit before Prophet. They're no Saint.

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