INDIANAPOLIS — Indiana’s largest hospital system said Thursday it will cut about 800 jobs and realign some services as part of a nationwide trend by large-scale providers to cut expenses and adapt to changing trends in health care, but the hospital system’s Goshen campus will not be reducing its workforce.
The cutbacks at Indiana University Health officials will go into effect by Dec. 1, company officials said at a news conference. Cuts will be felt at seven hospitals, including the system’s Indianapolis-area hospitals and those in Muncie and Tipton.
“This is going to affect every part of the organization. We don’t know who exactly is going to be affected by this,” IU Health President James Terwilliger said.
IU Health Goshen Hospital released a statement Thursday explaining that the hospital has no immediate plans to eliminate positions.
“Goshen is not immune to the external forces affecting the financial welfare of the health care industry,” according to the statement. “The good news is that we are positioned to fare well if — with the help of colleagues and the broader community — we continue to pull together to streamline processes, develop valuable partnerships and adapt to the changing health care environment while maintaining an outstanding level of patient care.”
Officials said the system is trying to save $1 billion over five years.
IU Health’s website said the 19-hospital system, with facilities throughout the state, has more than 24,000 full-time employees. The system will offer some employees early retirement, and those employees must make their decision by Sept. 22, officials said.
Terwilliger said the cuts, along with a related realignment in how IU Health delivers services, reflect declining reimbursement rates and decreases in hospital admissions as patients increasingly seek alternative care.
“These things are happening across the country,” he said.
Hospitals, especially emergency rooms, are among the most expensive places to receive care, in part because of staffing a wide array of equipment and remaining open around the clock. With the high cost in mind, insurers and employers have been steering people when possible to alternatives, such as outpatient care centers or home care.
Patients began to cut back on or delay elective procedures like knee surgeries to cut expenses after the recession started in 2008. Many industry observers say those patients have been slow to return.
“Patients are making decisions to not come to hospitals the way they did,” said Dr. Jeff Sperring, president and CEO of Riley Hospital for Children at IU Health.
Federal funding cuts and growing populations of uninsured patients also have pressured profitability.
IU Health officials said the changes did not mean the health care industry was in decline, but just that it was changing. Sperring said IU Health will be looking for new ways to treat patients that don’t involve hospital admission, and he did not believe the cuts would affect patient care.
“This is all about patient care,” he said. “This is about delivering care where they need it now.”
St. Vincent Health, an Indianapolis-based network of 22 hospitals, announced in June it was making similar cuts.
Elkhart Truth reporter Angelle Barbazon contributed to this article.
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