St. Francis Hospital is in the process of laying off 55 employees, a hospital administrator confirmed Tuesday morning.
In addition to eliminating the jobs in non-bedside care positions, an undetermined number of the hospital’s nearly 2,500 employees will have their hours reduced, said CEO David Koontz. Full-time employment statuses and benefits packages will not be impacted by the adjustment in hours, he said.
“When I say bedside care, I am talking about people who are directly touching the patients in the nursing units,” Koontz said.
Employees who lose their jobs will be encouraged to apply for other open positions at the hospital, according to a statement the hospital released.
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The move comes 18 months after St. Francis was sold to LifePoint Health, a national hospital corporation based in Tennessee.
“We have not had a layoff since the news broke that they were misreporting the financial statements in 2014,” Koontz said. “This is part of the ongoing recovery that LifePoint has been helping St. Francis with since the acquisition. We have been changing the supply chain, the processes, renewing contracts and we have been improving our revenue cycle. ... This is necessary medicine for us and not the first thing we want to go to.”
St. Francis was purchased by LifePoint Health of Tennessee on Dec. 31, 2015.
In November 2014, St. Francis executives termed a nearly $30 million financial hole an “accounting inaccuracy.” St. Francis publicly disclosed at that time it had suspended Chief Financial Officer Matt Moore and that he had been “permanently relieved of his duties.” Longtime President and CEO Robert Granger, who had been a chief financial officer prior to coming to St. Francis, resigned in March 2015.
St. Francis’ largest creditor was the U.S. Department of Housing and Urban Development, which has a hospital financing arm. St. Francis borrowed about $220 million from HUD for a major expansion and to consolidate other debt. That debt has been at the center of the hospital’s problems.
The HUD Office of Inspector General completed a nearly six-month audit in June 2015 and found St. Francis and its management did not comply with federal regulations and a regulatory agreement connected to the financing of its $252 million expansion and campus renovation completed in 2013.
Specifically, the audit report dated Sept. 3, 2015, said the hospital “submitted inaccurate financial information, improperly disbursed mortgage proceeds, incurred an unauthorized liability, and subjected mortgage funds to bank sweeps.”
St. Francis has operated at a financial loss since at least 2014, Koontz said. The loss in 2016 was not as large as the previous two years prior to LifePoint ownership, Koontz said. He declined to state the amount of the losses, only saying they “were in the tens of millions of dollars.”
Since its inception, St. Francis had operated as a nonprofit corporation. That changed when LifePoint, a public company, purchased the hospital. LifePoint trades on Nasdaq and closed Tuesday at $64.85 per share, down 80 cents.
When St. Francis shifted to for-profit ownership, the hospital was subject to additional taxes, including property taxes. In 2016, the hospital paid about $6 million in property, sales and professional taxes, Koontz said.
St. Francis opened 65 years ago as the result of a community-based fundraising effort as a 154-bed hospital. The hospital averages more than 300 patients in beds per day, Koontz said.