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The Dose

Welcome to The Dose, which tackles the business and economics inside the turbulent world of health care and life sciences in Indiana. Your host is John Russell. To contact me call 317-472-5383.

Jobs in limbo as St. Vincent buys out partner in neighborhood hospitals

January 28, 2019

Dozens of nurses, lab workers and back-office workers at five St. Vincent Neighborhood Hospitals face an uncertain future as the Indianapolis-based health system prepares to buy out its joint-venture partner and take over operations.

St. Vincent confirmed it has signed a letter of intent to assume the purchase of the hospitals from Tandem Hospital Partners, based in Houston. The deal is expected to close Friday.

St. Vincent sent a 27-page memo to employees of the neighborhood hospitals on Jan. 18, asking those who want to continue employment to submit information to St. Vincent.

“During the next 30 days, we will review the organizational structure, and this may or may not have implications to the initial job that you are hired into with St. Vincent,” the memo said. “Many of the functions at the neighborhood hospitals will continue to be needed, however we anticipate that some functions/positions will be supported by existing St. Vincent resources.”

A St. Vincent spokesman declined to say how many jobs might be affected by the sale. He said the hospitals would “continue to offer the same high-quality patient care with no change in services.”

It’s unclear why Tandem is selling. The company did not return several phone calls or emails from IBJ. The five-year-old company specializes in building small, neighborhood hospitals.

Three of the local hospitals are in the suburbs—Noblesville, Avon and Plainfield. Two are in Indianapolis—one in the Castleton area and the other on the south side, on Emerson Ave., just off the County Line Road.

St. Vincent is the majority partner in the hospitals, owning 51 percent of the joint venture, while Tandem owns 49 percent, according to internal documents reviewed by IBJ in 2017.

Although the hospitals bear the St. Vincent name, the health system actually has had a minor role in the day-to-day operations. Under the ownership structure, Tandem set up another unit, THP Management, to run most of the hospitals’ services under a separate management-services contract.

THP Management provides nursing, laboratory services, billing and collection, financial and operating-system management, budgeting, purchasing, marketing, advertising, technology, recruiting and “supervision of the day-to-day staff,” according to internal documents.

All Tandem workers who stay after the ownership shift will become St. Vincent employees, hired into a similar job title with the same base rate, the memo said.

The tiny hospitals span just 17,000 square feet each, or less than one-third the size of a football field, making them much smaller than traditional hospitals.

Instead of patient towers and a clinical staff of thousands, the hospitals each have a skeleton staff of a few dozen workers who tend to seven emergency beds, eight overnight beds, imaging, pharmacy and lab services. The buildings are cheaper to build than full-service hospitals and have less overhead.

The hospitals, which tout their convenience and quick turnaround time, do not offer surgeries or long-term acute care.

St. Vincent and Tandem opened the hospitals on a rolling basis beginning in the summer of 2017. Since then, they have seen more than 21,000 patients.

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