Franciscan Alliance (FA) is blaming the Affordable Care Act--among other
things--for a 1.4-percent workforce reduction, announced just before
The “systemwide staff reductions” will affect 275 employees--of 20,000
total--at FA’s 11 hospitals and health facilities in Indiana.
“The healthcare industry is changing rapidly and economic pressures are
forcing substantive changes in the field, including reduced reimbursements,
new payer models, healthcare reform laws and shifts from inpatient to
outpatient care,” FA said.
“Franciscan Alliance has not been immune to such pressures and has found it
necessary to align staffing levels to reflect lower patient volumes and
reduced industry wide reimbursements brought on by reforms associated with
the Affordable Care Act,” FA president and CE) Kevin Leahy said.
“Like other health systems, Franciscan Alliance must cut its costs of care
delivery over the next 3 years by 15-20 percent”-- or by $375 million to
$500 million--“to remain viable,” FA said.
The announced cut of 275 positions follows the elimination last month of 125
jobs in FA’s South Suburban Chicago Region, the statement noted.
In addition, FA said, “another 650 full-time equivalent positions will be
eliminated by cutting back on assigned hours, closing open positions,
retirements and through attrition.”
Going forward, its remaining 19,000 employees will see cutbacks in benefits
in 2014, FA said. “These cutbacks include the elimination of the 1.5-percent
employer match to the 403b retirement savings program, elimination of the
PTO buy-back program, higher employee contributions for healthcare
insurance, no salary increases for management, and a new defined
benefit/defined contribution pension for all co-workers not vested by
1/1/2014 in the defined benefit pension plan.”
“The cost savings from these, and other recent pay practice changes, will
help preserve hundreds of other jobs, which otherwise would have to be
eliminated,” FA said.
“Recent trends and the new law are challenging healthcare providers to
manage the continuum of care for patients more efficiently and effectively
to ensure the same quality outcomes at reduced reimbursement levels,” Leahy
said. “Our challenge is to staff our campuses in line with the reduced
inpatient volumes that are a byproduct of recent healthcare trends and the
“The staff reductions are among several initiatives Franciscan Alliance has
undertaken, such as streamlining patient flow processes and coordinating
care across the system to deliver quality outcomes and improve patient
satisfaction,” the statement said. “Ongoing non-labor cost efficiencies
continue to be researched, identified, implemented and monitored throughout
the system as well.”
“We are profoundly aware of the impact our decisions have on the lives of
our co-workers and their families,” Leahy said. “Consistent with our
Franciscan values, we will make every effort to support all Franciscan team
members through these difficult changes. Those whose jobs will be affected
by the workforce reduction will be provided with severance, extended health
insurance where eligible, and outplacement assistance.”
“Whatever measures we take will not compromise our goal to provide patients
the high-quality, compassionate care they expect and deserve,” Leahy added.
FA operates a 24-hour ER department on Indian Boundary Road in Chesterton
and Franciscan St. Anthony Health in Michigan City, among its facilities.
No one was available this morning to discuss the workforce reductions with
the Chesterton Tribune.