Mercy Healthcare Sacramento to ‘Disappear’ as Part of CHW Restructuring
Mercy Healthcare Sacramento will "cease to exist" after it is folded into a larger coalition of hospitals as part of parent company Catholic Healthcare West's "massive restructuring plan," the Sacramento Business Journal reports. CHW is "collapsing" its 10 regional operations into four divisions; Mercy will join the Northern California Division that extends from Merced to Redding. The division will include 15 hospitals in eight "natural markets" -- Sacramento, Woodland, Sierra Nevada, San Andreas, Merced, Oakdale, North State and San Joaquin. The "shake-up" at CHW is part of the company's plan to save $100 million annually. CHW has suffered "huge losses" in recent years, including operations losses of $317.9 million on total revenue of $4.8 billion in the fiscal year that ended June 2000 and total operating losses of $656.9 million over the past two years. CHW President and CEO Lloyd Dean said, "CHW currently suffers from an overly complex and costly organizational structure which impedes timely and effective decision making. The restructuring will enable CHW to focus its primary resources at the local level so that our hospitals can make decisions based on what is best for their communities." The new Northern California Division will be headed by Ed Schroeder, currently president and CEO of Stockton-based St. Joseph's Regional Health System, which is owned by CHW. CHW's restructuring will be completed by July 1 and will result in the elimination of about 350 jobs in its corporate and regional administrative offices. CHW said that the plan will have "minimal impact" on patient care (Robertson, Sacramento Business Journal, 2/12).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.