Fresh from reviewing a consultant’s recommendations, Provena Health this summer is looking at layoffs at its seven hospitals and considering selling off its HMO if the Catholic health-care system hopes to recover from recent losses and reinvest for expansion.
While the exact number of job cuts won’t be known until later this summer, Frankfort-based Provena says jobs will have to be cut if the hospital is expected to turn a projected $12.5 million operating loss into an $8 million profit on operations by the end of the year.
Provena’s new chief executive and consultants from The Hunter Group say they have created a turnaround plan designed to streamline operations and focus on the core business of providing inpatient and outpatient medical care.
That means certain businesses could be sold as well. Provena is evaluating options for PersonalCare Health Management, an HMO that insures 90,000 people in Champaign, Kankakee, Springfield and Danville, Ill.
“We need to improve revenues from our performance so we can reinvest in capital resources for growth,” said William Foley, who became Provena Health’s CEO in August.
As one example, Provena later this year may seek state approval for a new ambulatory surgery center in Champaign, Foley said.
But first, Provena’s hospital executives in the next two months will determine the scale of layoffs at each facility. Provena is hoping to soften the blow to any laid-off workers by offering them open positions throughout its system. Provena has 300 openings currently; systemwide, it employs 10,400.
Provena owns area hospitals in Waukegan, Elgin, Aurora and Joliet and Downstate in Kankakee, Danville and Urbana.
Baxter changes auditor policy: In the wake of the Enron Corp. scandal, Baxter International Inc. said it would no longer use the same company for both auditing and consulting services.
The Enron debacle has created some concerns among investors that auditors’ judgment could be compromised if they also are providing consulting services to a company.
Enron’s auditor, Chicago-based Andersen, has been indicted in the destruction of Enron documents after the energy giant’s troubles led to its bankruptcy filing.
In Baxter’s case, the Deerfield-based medical product-maker has used PricewaterhouseCoopers for accounting and consulting, but recently decided to use only the firm’s auditing services. Baxter shareholders Tuesday re-appointed PricewaterhouseCoopers as independent accountants.
Even though PricewaterhouseCoopers is in the process of spinning off its consulting unit, Baxter says it won’t use the company for consulting–at least until the spinoff is complete.
“It’s not that they didn’t do good work, but it’s a perception we can’t live with,” Baxter CEO Harry Kraemer told shareholders at the company’s annual meeting Tuesday.
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Humana to cut jobs: Humana Inc. confirmed 38 jobs will be eliminated by the end of the year as the HMO consolidates its complaint department in Chicago into the main grievance and appeals operation at the insurer’s Louisville headquarters.
Humana said the HMO is trying to streamline its grievance process by handling complaints at one location. The HMO said consumers won’t notice the difference because they call the insurer via a toll-free number that won’t change.