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The Honolulu Advertiser
Posted on: Wednesday, April 18, 2001

St. Francis to cut 150 jobs

By John Duchemin
Advertiser Staff Writer

St. Francis Healthcare System will eliminate 150 jobs as the hospital organization struggles with higher medical costs and lower government reimbursement levels for Medicare.

The 2,200-employee nonprofit organization, which operates two hospitals and several subsidiaries statewide, is the latest Hawai'i hospital to undertake cost-cutting measures in the past several years.

Other hospitals have closed departments, laid off employees and merged operations.

Company officials will tell employees the news this morning, St. Francis spokeswoman Maggie Jarrett said. Most of the workers affected will be in administration and management at the organization's Liliha Street headquarters, Jarrett said.

"Those employees who deal directly with patients will be the least affected by this," Jarrett said.

St. Francis has lost money for about a year, Jarrett said.

She declined to provide specific financial details, but said the hospital is being affected by recent lower levels of federal Medicare reimbursements.

Because of lower federal Medicare reimbursement levels, hospitals in Hawai'i have taken a $142 million hit over five years, according to statistics calculated by the Healthcare Association of Hawai'i. They also face a $6 million per-year hit from reduced state Medicaid payments for needy patients, which should take affect in 2002 and 2003, according to the association.

Meanwhile, medical costs have risen — both in terms of drug costs, and the amount of charity care provided to patients. The hospitals provided $70 million in charity and unpaid care last year — up from $52 million in 1998, the association said.

The grim financial setting has led many hospitals to cut costs. Kapi'olani Health, Straub Clinic & Hospital and Wilcox Health System of Kaua'i agreed earlier this year to a three-way merger. Queen's Medical Center has eliminated several departments.

St. Francis also had a restructuring last summer, Jarrett said, though she characterized it as minor. "That was more a shuffling of duties to be more efficient and didn't affect many jobs," she said.

St. Francis is sponsored by the Third Franciscan Order of Syracuse, N.Y. It founded the 300-bed Liliha Street hospital campus in 1927, and also sponsors the 100-bed St. Francis Medical Center-West on Fort Weaver Road.

The St. Francis system also includes a home-care and hospice division, a foundation, a for-profit enterprise and statewide dialysis and renal services.