MERCY HEALTHCARE SACRAMENTO: Doc Business Sees the Ax
On the heels of Mercy Healthcare Sacramento's announcement last month that it was cutting $13 million from its hospital operations to stem projected deficits of up to $20 million, the company last week "turned its scalpel to the doctor side." The Sacramento Business Journal reports that Mercy is projecting "an $8 million budget deficit on the doctors' side of the business for the fiscal year than ends June 30" and will attempt to reduce the deficit to $4 million by the end of the fiscal year. Under Mercy's turnaround plan for its doctor operations, $600,000 in cuts will come from "labor-related expenses." Mercy said it wants to trim 31 positions at Catholic Healthcare West Medical Foundation -- the physician management company with which Mercy's parent, Catholic Healthcare West, contracts -- and will not fill 20 Sacramento area positions that are currently vacant. "In identifying areas for cost reductions, every effort has been made to minimize the impact of these turnaround efforts on our patients, our physicians and our staff," said COO Tom Blinn. "However, in an organization in which labor represents our most significant cost factor, we cannot avoid the need to make some reductions in our labor expenses," he said.
Revenue BoostingAside from job cuts, Mercy plans to reverse earnings projections by increasing revenue in a "variety of ways." The Business Journal reports that CHW Medical Foundation "will attempt to negotiate higher rates for physicians from health insurers" and is shoring up its billing technology to "better track" payments. In addition, Mercy is asking doctors "to see more patients and refer fewer of them to doctors outside the Mercy network." CHW Medical Foundation will also try to secure higher rates for out-of-network care and more "case management" services for chronically ill patients (Bole, 2/8 issue). Click Mercy Healthcare for previous coverage of the hospital system.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.