Pink slips are a thing of the past for employees at Franciscan Health System of Cincinnati.
"Employees know when they come in here they won't face a layoff," said Tate Shepard, Franciscan's director of human resources. "They come into an environment that empowers employees, giving them an opportunity to progress within a system."
In 1991, Franciscan began what it calls the Employment Security List. Under the program, Franciscan employees who lose their positions through redesign stay on the payroll-maintaining their old wages and benefits-by working at temporary jobs. During this period, which can last anywhere from one week to a year, employees are offered retraining and education for a new position when it becomes available, Shepard said.
Since the program's inception, 356 employees have been placed on the list, and 297, or 83%, have been reassigned, said Kim Walters, Franciscan's public relations manager. Forty-nine employees resigned, and 10 are currently on the list, she said.
At the same time, Franciscan has reduced the number of full-time-equivalent employees by 14%-to 2,538 in 1995 from 2,935 in 1990-through attrition and eliminating unnecessary positions, Shepard said.
"The list helps us reduce the costs of turnover (and) advertising for new employees and keeps morale high," Shepard said. The system figures it has saved $9.7 million in labor expenses over the five-year period. In 1995, labor expenses totaled $74.2 million, only about 1.8% more than in 1990. That's about 46% of total expenses, Shepard said, compared with the national average of 53% for labor expenses in 1994.
The last layoff at Franciscan was in 1988, when 40 of about 3,000 employees were laid off to reduce operational losses. From 1989 to 1991, the system lost a total of $5.5 million.
"We were in the red the first year (of the program in 1991), but we turned it around very quickly," Shepard said. In 1992 the system earned $2.4 million. In 1993 and 1994 the system netted a total of $8 million for a 5% average operating profit margin. In 1994, revenues totaled $163 million.
Besides adding the security list, Franciscan began a quality improvement program to reduce costs, Shepard said. Through 115 "quality action teams," which comprise employees, physicians and volunteers, the system has saved $18.4 million over the last five years by streamlining clinical and administrative areas.
For example, QATs have reduced medication delivery times, improved outcomes for rehabilitation patients, reduced delays in operating room start times, streamlined the admission process and improved billing services.
In 1994, Tate said the system saved $4.4 million from operational changes suggested by QATs.
Franciscan's efforts were recognized last year by the Healthcare Forum, which awarded the Catholic system its 1995 Commitment to Quality Award.
Last October, Franciscan consolidated operations with Franciscan Health System of Dayton to form Franciscan Health System of the Ohio Valley.
The new three-hospital system currently is working to consolidate administrative services, including the Cincinnati-based system's Employment Security List and the Dayton-based system's "Reassignment List," a similar program begun in 1993.
Franciscan Health System of the Ohio Valley is sponsored by Franciscan Sisters of the Poor Health System, an eight-hospital system based in New York.
"Combining the two programs will give us additional opportunities (for employees) within the system," Shepard said. "Some of our people live between Cincinnati and Dayton. This consolidation will only help the program."