CLIVE, Iowa (KCAU) – On Tuesday, MercyOne announced plans to adjust staffing levels and other direct expenses to address decreased revenues that were caused by the COVID-19 pandemic and ensure the health system remains able to best serve its communities.
MercyOne President and Chief Executive Officer (CEO) Bob Ritz said, “Our mission is to be a compassionate, healing ministry to transform the health of our communities, and we are making painful but necessary decisions to ensure we sustain our organization into the future.”
He adds, “Like most hospitals and other industries across the country, we are facing significant pandemic-related challenges. As we ramped up to support patients afflicted with COVID-19 and paused outpatient and elective services during stay-at-home orders, our revenues fell and operational costs increased. While we are appreciative of the financial support we received from the CARES Act which has helped cover our operating deficits for a few months, it only covers approximately 50% of our losses.”
The hospital said though there are positive signs the patients are returning for services, it expects that recovery will be gradual, and there are many unknowns with a possible resurgence of the coronavirus and the country’s economic recovery.
“We are seeing gradual rates of patient volume increase but expect our revenue will be lower than previous levels for at least the next 12 to 18 months. In order to align our cost structure with this lower level of patient volumes, we are making difficult decisions which impact our colleagues,” said Ritz. “We are a healing ministry of people caring for people, and we will do our best to support our colleagues facing transitions.”
In the first quarter of Fiscal Year 2021, which started on July 1, MercyOne will implement workforce changes.
Some of the affected colleagues will be among those who were furloughed over the last few months. Some staffing decisions will be position eliminations and others will consist of extended furloughs or reduced schedules.
The hospital adds that all colleagues, whose positions are eliminated, will be eligible for a paid notice period, severance pay, and health and other benefits through their severance period.
Since March 2020, MercyOne said it has invested significantly in supplies, pharmaceuticals, staffing, and other needs to ensure colleague, provider, and patient safety to address the COVID-19 pandemic.
During this time, the hospital has also taken several actions to manage expenses through temporary closure of under-utilized services, colleague furloughs and lowered schedules, and executive leader compensation reductions.
“We must now focus on what is required to restructure our organization and redesign our services to meet the needs of our patients as we continue to live with the presence of COVID-19,” said Ritz. “I am confident MercyOne will emerge from this challenging time as a strong organization. We remain committed to our mission, and we will persevere to fulfill the health needs of the communities we serve.”