INDIANAPOLIS (WISH) - Another Indiana hospital system is cutting its workforce.
Franciscan Alliance announced Wednesday plans to cut 275 workers from its 11 Indiana facilities. It represents 1.4 percent of the hospital system’s employees.
The health provider cited a changing industry for its need to reduce company costs by 15 to 20 percent in the next three years. Cutting 275 employees is just one piece of the financial puzzle for Franciscan Alliance.
The group’s south suburban Chicago region just cut 125 jobs, and “other operating divisions” were expected to give notice to another 275 employees that they would be laid off. And, 650 full-time equivalent position are being eliminated through retirement, attrition, closing open positions and reducing hours.
Employees who don’t lose their jobs will see less generous benefits next year. Managers also won’t get pay raises.
Franciscan is the third hospital system in the last three months to announce layoffs.
In September, IU Health announced it was letting 900 workers go.
“Hospitals are doing what they can to become more efficient without jeopardizing quality and safety,” said Brian Tabor, Indiana Hospital Association Vice President of Government Relations.
Tabor says the healthcare industry is undergoing a transformation brought about by the fact that fewer patients are visiting hospitals and reimbursements from insurance companies and government programs like Medicare are on the decline.
“You put all of those things together on an economy that is still really just recovering and you have a recipe for the kinds of things we are seeing and what we've seen today,” said Tabor.
Industry experts say the Affordable Health Care Act, or Obamacare, also plays into the layoffs as hospital CEOs look for ways to cut back.
“The Affordable Care Act (is responsible for) reductions in payments to hospitals over 10 years (of) almost $4 billion for Indiana hospitals alone,” said Tabor.
Tabor says the health care worker layoffs shouldn't affect care. That's because the way hospitals reimbursements are tied to the quality of care.
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