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The Dose - JK Wall

Welcome to The Dose, which tackles the finances behind local health care and life sciences and points to the most interesting national analysis. Your host is J.K. Wall.

Health Care & Life Sciences / Life Science & Biotech

After revenue rebounds, Hoosier hospitals start hiring again

August 3, 2015

The major hospital systems in the Indianapolis area all cut their work forces in 2013 as patient visits swooned.

Then, as patients starting coming back in 2014, those staff cuts turned into fat profits for the hospitals.

But since late last year, hospitals in the Indianapolis area and around the state have been steadily hiring again, according to the latest surveys by the U.S. Bureau of Labor Statistics.

Indiana hospitals added 2,400 jobs from September 2014—when employment bottomed out—through June, the latest month for which the federal government has released data. Statewide, hospitals now employ 114,000 people.

That’s an increase of 2.2 percent, which compares with 1.9-percent growth in jobs across all sectors of Indiana’s economy.

In the Indianapolis area, hospital employment also bottomed out in September, and now has grown by 1,100 jobs to a total of 40,000.

The government’s job data for cities, however, can only be used to compare the same month in each calendar year. Hospital employment in the Indianapolis area grew by 600 jobs from June 2014 until June 2015, an increase of 1.5 percent.

Eskenazi Health will host a recruitment fair on Thursday to help it hire 60 additional nurses it says it needs to serve rising numbers of patients and to help it prepare for coming retirements by baby boomer nurses.

The number of inpatient visits at its downtown hospital grew 3 percent in 2014 and the number of births there grew 11 percent last year. Eskenazi does not have 2015 data available for public release, but a hospital spokesman said the 2014 rates of growth have continued into this year.

Also, IU Health hired 452 nurses from October through March at its downtown Indianapolis hospitals once it realized its staffing levels were too low for the rebound in patient visits that started in the summer of 2014.

Nurses at IU Health’s Methodist hospital did have to work short-staffed late last year and early this year, according to a report by the Indiana State Department of Health. Frustration with the situation has fueled an effort by nurses to form a union at IU Health’s Methodist hospital.

Patients aren't flocking back to hospitals across the board, however. In April, IU Health issued its first-quarter financial report, which showed increases in physician-office visits, but continued weakness in the number of surgeries and emergency room visits by patients.

Some experts think the rising prevalence of high-deductible health plans is making patients more eager than ever to avoid those high-dollar visits.

But hospitals have been helped by the end of a long spell of joblessness. Indiana’s unemployment rate is now 4.9 percent, which economists view as a job being available for everyone that wants one.

Also, hospitals have benefited from Obamacare, according to a June report from Moody’s Investors Service. The law’s individual mandate to obtain insurance led more patients to sign up for Medicaid coverage that they were already eligible for or caused uninsured Hoosiers to buy private insurance.

Also, Obamacare’s tax credits fueled an increase in individual insurance coverage in Indiana.

Now, in 2015, Gov. Mike Pence’s expanded version of the Healthy Indiana Plan—paid for with Medicaid funds approved by Obamacare—has increased health coverage by more than 150,000 Hoosiers.

All those factors are boosting hospitals’ finances, noted Moody’s analysts Daniel Steingart, Lisa Goldstein and Kendra Smith, referring to Obamacare by the acronym ACA, which stands for Affordable Care Act.

“The ACA has had a significant impact on hospitals located in Medicaid expansion states (including Indiana); the primary effect has been to lower bad debt expense and shift payor mix away from self pay patients to Medicaid,” they wrote. But, they added, “Factors like macroeconomic conditions, and hospitals’ push to cut expenses and improve productivity had a larger positive impact on overall financial performance.”

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