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Company news

May 28, 2013

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. St. Vincent spokesman Johnny Smith on May 23 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 look for expense reductions in its administrative functions, supply purchasing, and programs and services. He said he could not provide specific examples at this time. Other hospitals have been cutting expenses, too. Indiana University Health, the state’s largest hospital system, earlier this year delayed plans to expand its Methodist Hospital downtown. 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. 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.

Indianapolis-based WellPoint Inc. was one of 13 insurers selected to participate in California’s state health exchange, according to Bloomberg News. The selection is important for WellPoint, because the exchanges are likely to become the most common way its large numbers of individual and small-business customers buy insurance in the future. While the premiums the insurers will charge vary widely depending on a person’s location and income, the director of the exchange said May 23 that premium increases will be less than the 30-percent jump projected by consulting company Milliman Inc. However, few other states have followed California in having the state government be an “active purchaser” of health plans, which may help hold down premiums more than in other states’ exchanges.

Eli Lilly and Co. signed its fourth deal in the past year with a company to help it produce companion diagnostics to accompany its experimental drugs. On May 23, Denver-based Corgenix Medical Corp. announced that it would collaborate with Indianapolis-based Lilly for diagnostic tests to identify the patients most helped by Lilly’s experimental cancer drugs. Financial terms of the deal were not disclosed. Nearly a year ago, Lilly inked a deal with Massachusetts-based PrimeraDx to develop companion diagnostics for cancer and other types of drugs. Then in January, Lilly signed on to a similar arrangement wth Dako, a Denmark-based unit of California-based Agilent Technologies Inc. And in February, Lilly said it was expanding its partnership with Germany-based Qiagen, N.V., to develop companion diagnostics for all kinds of drugs. Qiagen already helped Lilly and New York-based Bristol-Myers Squibb Co. develop a test to identify subsets of patients that benefit most from the cancer drug Erbitux.

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