Carle Foundation Reduces Workforce by 2%

October 1, 2008

In response to recent financial challenges, The Carle Foundation announced that it has reduced its workforce by 72 employees, or 2.3% of its total 3060 employees, effective October 1.  The workforce reduction was necessary to assure adequate financial performance in the face of the rapidly changing healthcare reimbursement climate. This decision was reached after exhaustive analysis of revenue challenges the organization has experienced over the last nine months.  The positions eliminated were mostly management and professional employees.

James C. Leonard, M.D., president and CEO of The Carle Foundation said, “We are deeply affected by having to eliminate the positions of loyal, hard-working employees.  But as stewards of this community resource, we have an obligation to maintain strong financial performance in order to move forward with delivering excellent, accessible patient care for all.”

Carle’s Human Resources team is working with affected employees to support them and their needs during this period.  In addition to receiving severance pay, counseling will be available and qualified employees will be able to apply for other open positions within the organization.

Carle officials noted that although admissions have been at projected levels during the past nine months, the revenue associated with these admissions has not materialized as expected, causing the bottom line to fall below budget.  They further explained:  “The factors driving this shift were largely out of Carle’s control and were not preventable.

A combination of recent reimbursement rate reductions, delayed payments from the government, decrease in patient complexity, increase in uninsured volume and charity care, and changing payor mix have eroded revenue growth.  Projections showed that by the end of the fiscal year, the organization would be nearly $20 million behind budget. Despite a significant ongoing expense reduction plan and identifying additional revenue sources, the remaining gap was simply too large.  Reducing and restructuring part of the workforce was the only viable option remaining to ensure adequate financial performance.”

Gretchen Robbins, director of Public Relations for The Carle Foundation, emphasized that the position reductions were mostly in non-clinical areas, ensuring patient care at the bedside and clinical quality will not be affected.  “Carle Foundation Hospital prides itself on achieving high satisfaction scores from its patients, employees and medical staff.  We expect to continue the excellent performance in these areas, recognizing that patient care and clinical quality is our number one priority,” she said.

The reductions do not affect the recently announced integration discussions with Carle Clinic, nor do they affect the planning of the recently approved campus modernization construction project.  Officials said these two initiatives are important to Carle’s long-term success and the future of healthcare delivery in this region.

Based in Urbana, IL, The Carle Foundation is the not-for-profit parent company of a variety of health care services.  At the core of those services is Carle Foundation Hospital, a 305-bed facility, which serves as the regional medical center for individuals residing in east central Illinois and west central Indiana.

Note to editors: Carle officials will not be offering interviews.