News From Terre Haute, Indiana

Local & Bistate

February 3, 2014

Hospital responds to questions over pay

Cutting costs, salary assessment result in reductions

TERRE HAUTE — Pay rates have been reduced for Union Hospital physical therapy staff, and some employees have chosen to leave because of changes related to a new management service agreement, a hospital spokeswoman said Monday.

The hospital has entered into a management service agreement with Evansville-based ProgressiveHealth for therapy services.

A story about the new management agreement that appeared in the Jan. 21 edition of the Tribune-Star prompted several calls and emails from people who raised concerns about the changes, including significant pay cuts for physical therapy employees.

Like hospitals around the country, Union must make cutbacks because of the Affordable Care Act and declining reimbursement rates, said Kim Perkins, Union spokeswoman.

As it has worked to cut costs, Union became aware the physical therapy department “was not running efficiently and salaries were out of line with the rest of the country, including large cities,” Perkins said.

Union had an opportunity to work with ProgressiveHealth, which has been in business 20 years and operates in eight states.

The company has worked with Deaconess Hospital in Evansville for the past eight years.

“They come highly recommended,” Perkins said. “ProgressiveHealth showed us our [physical therapy] salaries were out of line, and we had to rightsize things.”  

With the changes, pay rates have been “adjusted to bring those employees in line with the national average, because those pay levels were higher than the national average,” she said.

Also, to improve quality and efficiency, therapists have been given an incentive plan “which would get them about what they were making anyway,” Perkins said.

She believes the incentive plan is “very fair” and it can be achieved. She said she didn’t know the criteria, “but I know it is used elsewhere and people are very happy with it.”

The physical therapy employees are still Union Hospital employees, she said, and full-time employees “have a rich benefit program.”

She did not know how many employees have left of their own accord since the management agreement was implemented, although she described it as “a handful.” Also, she could not provide specifics related to employee salary reductions.

Some of the employees who left “on their own accord” are working again on an as-needed basis, which is part-time with no benefits, she said.

Perkins did say that several months ago, before Union had a management agreement with ProgressiveHealth, “a few physical therapy assistants were laid off” because of the need to cut costs.

She noted that Indianapolis hospitals have been laying off hundreds of employees. In September, IU Health gave pink slips to 800 employees, citing declining reimbursements and fewer people being admitted to the hospital.

Last summer, Indianapolis-based St. Vincent Health laid off 865 workers.

“We’re lucky we have not had to make the changes we’ve seen in larger cities such as Indianapolis,” Perkins said. Union is trying to cut costs “without having to let people go,” she said.

The quality of patient care will not suffer with the changes to the physical therapy department, she said.

“Patients should see better quality and more efficiencies due to the management contract,” she said. “One of the reasons you put people on incentive programs is because people tend to do better when they are on incentive programs.”

Sue Loughlin can be reached at 812-231-4235 or



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