Franciscan Health parent to shift 61 employees to outside firm

The parent of Franciscan Health Indianapolis plans to shift 61 employees to an outside company and end their employment as Franciscan employees on Sept. 30.

The moves will affect employees in Indianapolis, Beech Grove, Lafayette, Michigan City, Dyer, Crown Point and Munster. All the employees work in Franciscan Alliance’s information services department.

The hospital system, based in Mishawaka, said all 61 workers will be offered employment with comparable wages by a managed services provider, R4 Solutions, a Cupertino, California-based company that specializes in health-care information services. They will continue to work on Franciscan projects.

“When faced with the necessary task of cutting costs in the Information Services Department, Franciscan leadership weighed multiple options, including reductions in the workforce and in compensation,” the company told IBJ in a statement on Monday.

It continued: “We believe this decision provides the best solution for our health care ministry while ensuring full-time continued employment for the rebadged employees.”

Franciscan notified the Indiana Department of Workforce Development of the moves earlier this month in a Worker Adjustment and Retraining Notification, or WARN. The Franciscan Alliance board of trustees approved what it called the “rebadging” last month.

“Even though these employees are being offered employment by the new employer, this is considered a permanent layoff by Franciscan,” the company wrote July 10 in its notice to the state.

Of the 61 affected employees, 39 work in central Indiana, either at a Franciscan location or from home. None work in direct patient care. Franciscan Alliance has roughly 19,000 workers systemwide at its 12 hospitals in Indiana and Illinois.

Franciscan Alliance said hospital systems across the country are still recovering from the financial impacts of the COVID-19 pandemic. “Franciscan Alliance is no exception.”

It’s just the latest cost-cutting move by an Indiana hospital. Earlier this month, Indiana University Health said it would end inpatient care and emergency services at its Blackford Hospital. In May, Community Health Network said it planned to cut an unspecified number of jobs through workforce restructuring.

Last year, Franciscan Alliance said it would close a 124-year-old hospital in Hammond and lay off 80 workers. Also last year, Ascension St. Vincent said it would close Dunn Hospital, a critical care hospital in Bedford, affecting more than 130 employees.

By John Russell, Indianapolis Business Journal