MERCY HEALTHCARE: Sacramento System Announces Layoffs
Mercy Healthcare Sacramento last week announced layoffs expected to save the system $3 million a year, the Sacramento Business Journal reports. In a strategy designed to improve the system's financial situation -- having lost about $2 million over the last fiscal year -- the system will lay off 50 employees, reduce the hours of another 50 employees and eliminate 50 vacant positions. Mike Profumo, an analyst with the Sacramento office of PriceWaterhouseCoopers, said, "The layoffs are an indication of what's happening in healthcare. If you can't maintain a bottom line, you can't handle debt service and other things. ... This is part of Mercy's efforts to bring their region back into profitability." Almost 10% of the affected employees hold management positions and an additional 30% provide direct patient care, including some physicians. Most of the layoffs will take effect next Tuesday. Mercy spokesperson Cindy Holst said, "What we hope to do on the labor side is eliminate positions through attrition and continue to try to find ways to decrease labor expenses." Mercy Healthcare Sacramento is a regional network of seven hospitals that controls one-third of the local health care marketplace. The system, a division of Catholic Healthcare West, lost $2 million, down from a net income of $1.9 million, in the fiscal year ending June 30. In August, plans to consolidate the MedClinic Medical Group in Sacramento and its umbrella group, the Catholic Healthcare West Medical Foundation, with the Mercy Healthcare Sacramento System were announced. Mercy's "turnaround plan" also includes renegotiation of managed care contracts "in hopes of getting better rates" (Robertson, 11/1 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.