As it announced in May, St. Vincent Health announced a 5-percent reduction in labor costs across the 22 hospital system Friday.
Last month, St. Vincent Health officials announced the intent to restructure its workforce that would include a reduction of employed and contracted associates. As a result of evaluating an array of costs throughout the system to ensure alignment with the needs of the communities served, the organization said in a press release.
Eligible associates were provided with severance packages, and outplacement support was given to all associates, regardless of role.
Sandy Herman, director of public relations at St. Joseph Hospital, said the reduction in labor costs took place in every hospital operated by St. Vincent, including the Kokomo facility.
“The leadership notified every associate that there would be a reduction in labor costs in order to remain competitive,” she said.
Herman would not comment on how many of the hospital’s approximately 800 employees could be impacted by the reduction in labor costs.
“We’re not in trouble,” stressed Herman. “We want to remain strong and competitive.”
Herman said the reduction is being brought about by a reduction in Medicare and Medicaid reimbursement.
She said when the health care legislation was passed the intent was to lower the reimbursement to hospitals through Medicaid and that more people would be insured to make up the lost revenues.
Herman said since the state of Indiana decided not to expand Medicaid, the hospital is not seeing a reduction in charity care.
The faith-based health system has experienced lower than budgeted volumes, decreasing reimbursement and took proactive steps to respond to changes within the healthcare industry, St. Vincent said in the press release.
“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 the utmost kindness and respect,” said Vincent C. Caponi, CEO of St. Vincent Health. “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.”
St. Vincent also operates hospitals in Elwood and Anderson.