Health system to trim 61 jobs
Posted on Saturday, October 4, 2008
Mercy Health System of Northwest Arkansas said Friday that it will eliminate its outpatient therapy services as part of an action that affects 61 positions.
The move is part of a broader retreat from community services formerly supported by the Catholic Health Care System, Mercy Health System officials said.
Forty-one people who occupied positions in departments such as registration, cafeteria and health-system information were immediately terminated.
Another 20 positions related to physical, occupational and speech therapy will be cut on completion of a patient’s therapy or upon the therapist’s relocation to another therapy outfit, said Jon Vitiello, the chief operating officer at Mercy Health System of Northwest Arkansas.
“It’s a tough day here,” Vitiello said in a telephone interview.
No future layoffs are expected, he said.
An estimated 400 outpatient therapy patients will be affected by the decision to end the services delivered at the Mercy Health Center facility, which sits next to Northwest Arkansas Community College on Arkansas 102 in Bentonville.
Another satellite location in Bentonville will be closed, Vitiello said.
Employees learned about the layoffs from a management team that included a “pastoral care” representative.
“We regret the action of today and feel deep sympathy for our co-workers and their families,” said Vitiello, who declined to say how much money the latest move will save.
About 43 people lost their jobs in June. The system will employ about 1, 500 workers after the 61 positions are cut.
“This action, combined with others that we’re working on, will put us back on track where we need to be financially, ’’ he said. “ Financially, we’re very stable both locally and regionally.”
The health system operates about 11 clinics in addition to its flagship facility, Mercy Medical Center in Rogers.
In Arkansas, the Sisters of Mercy, its parent health system, operates hospitals in Fort Smith, Berryville and Hot Springs. Nationally, the system operates about 18 acute-care hospitals and one heart hospital, in addition to clinics in five states.
Mercy Health System of Northwest Arkansas moved into the six-story, 200-bed facility in southwest Rogers in March. It replaced the 165-bed St. Mary’s Hospital at 1200 W. Walnut St.
But adjusting to operations at the new $ 145 million facility did not have any bearing on the decision to eliminate the outpatient therapy services, he said.
However, Vitiello said difficulties have prompted Mercy to cut or eliminate support to its hospice, adult day care, and clinic for the poor and uninsured over the past year.
“We added services that were related to our core, but as you start to have difficulties, you then think about what’s related, ’’ he said.
In the case of outpatient therapy services, Vitiello explained the decision was made three weeks ago when the health system decided to take action to stop incurring related losses.
Declining reimbursements and “ uncompensated care [that ] increased 26 percent” to $ 17. 9 million in the year-over-year comparison contributed to Mercy’s poor financial performance, Vitiello said.
Uncompensated care in Arkansas grew 182 percent to $ 341. 9 million over a 16-year period ending in 2006, according to a previous Arkansas Democrat-Gazette story.
Currently, hospitals calculate uncompensated care in different ways. But stricter Internal Revenue Service rules that take effect this year will require hospitals to standardize how they calculate uncompensated care, according to the Arkansas Democrat-Gazette.
Paul Cunningham, a spokesman for the Arkansas Hospital Association, said the association is hearing that times are tough for some of its 109 hospital members. “Revenues are down with increased operating costs certainly have an effect on the bottom line, ’ ’ Cunningham said. As a whole, the state’s healthcare economy is a little worse than a year or two ago, he said. At Washington Regional Medical Center, which operates a flagship hospital at Appleby Road and Shiloh Drive in Fayetteville, the “ national and local economic malaise” has affected its operations. The community hospital recently completed a $ 54 million building project at its main campus. Another floor was added to the main hospital in addition to the construction of several new buildings. The economic impact “ has not been major and so far has been manageable for our organization, ’’ Bill Bradley, the hospital’s president and chief executive officer, said in a prepared statement.
To contact this reporter: lwhalen@arkansasonline. com
FEEDBACK:
Something to say about this topic? Submit a Letter to the Editor online
