KentuckyOne Health lays off 500 of 15,000 employees, says it won’t fill 200 vacancies; cites Obamacare and merger

KentuckyOne Health, which dominates the Louisville hospital market and has scores of locations across the state, says it has laid off 500 of its 15,000 employees and identified 200 vacancies that it won’t fill, as it adjusts to federal health reform and the mergers that created it.

The company says it is trying to eliminate $218 million in expenses  by the middle of 2015. It is part of Denver-based Catholic Health Initiatives, and its CHI region “had the largest operating loss in the fiscal year that ended in June 2013, according to an October report by Standard & Poors, one of the firms that rates CHI’s creditworthiness for investors who buy its debt,” Chris Otts reported for WDRB.

KentuckyOne officials declined to give the number of layoffs by location. CEO Ruth Brinkley “attributed the changes in her company largely to a trend away from sick
care, which revolves around hospitals, to a greater focus on wellness
and disease prevention,” Laura Ungar reports for The Courier-Journal. “She said this trend preceded the Affordable Care
Act, but it was reinforced by the federal law. She also said hospitals
are facing declining reimbursements from Medicare and Medicaid, and a
payment model built around keeping people well rather than providing
incentives for more hospitalizations and procedures. . .. . Brinkley also cited staffing and other changes prompted by the merging
of hospitals that created KentuckyOne. She said mergers always bring
redundancies in services and staffing, often leading to consolidations.”

The company was formed in 2012 by the merger of the Lexington-based St. Joseph Health System and Jewish Hospital & St. Mary’s HealthCare of Louisville. The University of Louisville hospital was supposed to be part of the merger, but Gov. Steve Beshear blocked it on grounds that religious organizations should not control public facilities. A deal was negotiated, “turning over
management of most of the hospital to KentuckyOne while keeping the
facilities under public control,” Ungar reports. “Brinkley said despite financial
difficulties, KentuckyOne will continue to meet its financial and legal
obligations to U of L Hospital.”