IBJNews

St. Vincent gives big execs the ax; current job cuts just 'first pass'

Back to TopCommentsE-mailPrintBookmark and Share

The job cuts at St. Vincent Health last month were so extensive that even two of the hospital system’s C-suite executives got the ax. And one local hospital accountant predicts these cuts are just the first pass that St. Vincent—and all its hospital peers—will have to make.

St. Vincent laid off more than 850 workers, or about 5 percent of its work force. Based on its most recently reported financial data, a cut of that size will slash its labor expenses by about $55 million per year.

Dr. Jon Rahman, the chief medical officer for the 22-hospital system, was let go. Also getting a pink slip was Dr. Alan Snell, St. Vincent’s chief medical informatics officer, who oversaw the digitization of St. Vincent’s processes.

Neither Rahman nor Snell could be reached for comment. St. Vincent declined to make anyone available to comment on the dismissal of such high-ranking executives, or to disclose if any others were let go.

But it’s no surprise to Indianapolis hospital accountant Ed Abel.

“What they were trying to do was to minimize the impact on patient care. That means the first people to go are the non-patient-care folks,” said Abel, director of the health care practice at Blue & Co. He added, “As a general statement, that is going to be the area that is pared in all hospitals, not just St. V’s.”

Indeed, St. Vincent’s layoff is just the largest and most public to date among Indianapolis’ hospitals. All the other systems, Abel said, have also cut staff as they try to reduce expenses 15 percent to 25 percent.

“They’re all getting to the point where they don’t feel the reimbursement is going to be there,” he said.

Abel said he’s never seen a hospital system lay off its chief medical officer. On the other hand, it’s a recent phenomenon that hospital systems paid a doctor to hold that position as a full-time administrator—rather than as a job they do as an add-on to treating patients.

Rahman’s departure does save St. Vincent a chunk of money. In the 2011-2012 fiscal year, the most recent reported publicly, Rahman received total compensation of $480,621, according to documents filed with the Internal Revenue Service. St. Vincent does not report compensation information for Snell publicly.

But interestingly, that pay package doesn’t rank very high at St. Vincent. In 2011, he was one of seven full-time administrators receiving more than $480,000 in compensation. At the top of that heap was CEO Vince Caponi, who received total compensation of $2.5 million.

St. Vincent also got Caponi’s pay off its books last month, as he stepped down to take a position with Ascension Health Alliance, the parent organization of St. Vincent Health. St. Vincent is now looking for a new CEO.

Abel said letting executives go helps cut costs quickly. But he predicted that caregivers will be hit during St. Vincent’s next round of cost cuts. And he expects the same at Indianapolis’ other hospital systems.

“At some point, they’re going to hit the patient care areas,” he said. “I don’t think anybody has really fully realized it.”

ADVERTISEMENT

  • How's that Obamacare working out for you???
    This is only the beginning - just wait(not talking about St V's here either). There should be a way to stop PPACA before it puts thousands of small businesses, hospitals, etc. down the tubes. It'll be a country of part-time workers supporting the Entitled Ones" that we'll have to pay for too in addition to those who can't get insurance because of pre-existing conditions. What other form of insurance lets you buy a policy AFTER a claim occurs? Not homeowners, not auto, not professional liability..... I just don't get it. Pass it and then read it indeed!
    • RE: Sally
      Sally, of course there hasn't been any analysis done. You are expecting way too much out of our local media.
    • Medicare Expansion
      Has there been any analysis on whether this situation could have been avoided or mitigated had Indiana not opted out of Medicaid expansion?
    • Thanks Joyce
      for that. For each 480k exec they ax, they can probably keep 6 or 8 nurses.
    • Layoffs
      Isn't the federal government wonderful? Celebrate the change.
      • Hospital Biz
        Well Community Hospital East has been doing the same thing but they did not let of their big-shot executives go and last I heard there were still 9 CEO's running around in their pulling down substantial salaries. How that can be justified is beyond me while laying off people near their retirement age and some of these people were cleaning people not making more than $18,000 per year. St V and Community Health Network have gone nuts with the expanding and expanding into each other's territories and one of these day's they are going to be just like the banks and department stores. They will go the way of the DoDo.

      Post a comment to this story

      COMMENTS POLICY
      We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
       
      You are legally responsible for what you post and your anonymity is not guaranteed.
       
      Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
       
      No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
       
      We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
       

      Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

      Sponsored by
      ADVERTISEMENT

      facebook - twitter on Facebook & Twitter

      Follow on TwitterFollow IBJ on Facebook:
      Follow on TwitterFollow IBJ's Tweets on these topics:
       
      Subscribe to IBJ
      1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

      2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

      3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

      4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

      5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

      ADVERTISEMENT