MERCY HEALTHCARE SACRAMENTO: Feels the Squeeze
As part of an "aggressive turnaround plan," Mercy Healthcare Sacramento is making budget cuts totalling $13 million in an attempt "to stem a projected budget deficit of $15 million to $20 million." The Sacramento Business Journal reports that the "primary culprit" has been federal Medicare cuts which cost the hospital system $1.1 million each month. But low reimbursement rates from private HMOs, expensive contracts with union nurses, earthquake retrofits and computer fixes have "compounded the problem." To make the necessary cuts, Mercy will eliminate approximately 50 local jobs in the coming weeks and cancel other contracts, the Business Journal reports. Mercy has been "drumming up" additional revenue by negotiating higher rates for PacifiCare Health Systems Inc.'s Medicare HMO members, asking patients for cash deposits and copayments at local emergency rooms and attempting to increase referrals to its Bruceville Terrace long-term care center. Of the turnaround plan, Mercy spokesperson Cindy Holst said, "This has been very painful for the organization, but we have designed it with the goal of minimum disruption to our patients, employees and physicians." She added, however, that Mercy "is not alone in dealing with these financial issues. These challenges are being faced by health care organizations throughout ... the nation" (Robertson, 1/25 issue).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.