LORAIN — Twenty Mercy Regional Medical Center nonunion employees were laid off Thursday, part of a $10 million savings plan by hospital leaders.
Mercy CEO and President Ed Oley said the plan, which includes $3.5 million in salary reductions, is in response to $12 million less in projected annual private reimbursements, Medicare and Medicaid reimbursements and shorter hospital stays.
Mercy officials estimate they will deliver about $24 million in uncompensated care by year’s end including charity cases, community services and non-reimbursed Medicaid costs. The hospital is projected to have a
$4.1 million deficit this year.
Oley said hospital admissions are at the same pace as last year, but hospital stays are 11 percent shorter due to better coordination and efficiency. “We begin planning with our doctors, the discharge of a patient, the day they get into a bed,” he said during an interview with Chronicle-Telegram Editor Andy Young.
Oley said the hospital initially hoped to make the cuts through attrition, but it wasn’t financially feasible.
“Because of the decrease in length of stay, we don’t need as many people,” Oley said. “A part of what we’re trying to do today is adjust to that and become more efficient at the same time.”
The layoffs involve support staff and non-clinical positions at the hospital at 3700 Kolbe Road, according to Mercy spokeswoman Janis Yergan. Nearly 1,200 of the approximately 2,000 hospital employees are unionized.
As part of a 3 percent payroll reduction, Mercy is also not filling some unfilled positions and going to “team-based nursing” which Oley said would improve care.
Leaders of Service Employees International Union District 1199, which is in stalemated contract negotiations with Mercy over the 590-member nurses’ local, said Mercy officials are understaffing nurses to save money, which could hurt patient care.
Oley denies the contention. He said Mercy was one of just three hospitals in Northeast Ohio to receive a high-performance designation from the Joint Commission, a nonprofit, national hospital accreditation organization.
Yergan said the layoffs and staffing changes are a “very well thought out, strategic approach” to health-care reform and unrelated to contract negotiations. “These are things that hospitals will have to do,” she said.
SEIU President Becky Williams said union leaders are still hopeful of reaching a contract with Mercy, which is seeking benefit and pension cuts. Changes being proposed by Mercy and Catholic Healthcare Partners, the Cincinnati-based nonprofit hospital chain that owns Mercy, would switch nurses’ pensions from a defined benefits plan to a 403(b) plan.
The plan is similar to a 401(k) pension that relies on stock market investments. Mercy also wants nurses’ health care contributions to increase from 17 percent to 20 percent with higher co-pays and deductibles SEIU Secretary/Treasurer Al Bacon previously said the union is seeking between 3 and 4 percent annual wage increases for the three-year contract that expired Aug. 31. Oley, who wouldn’t say how much he earns annually, said the hospital is offering about 1.7 percent annual increases. Nurses earn an average hourly wage of about $26.81, according to the union.
Williams said union leaders have not decided on whether to strike. They would have to give Mercy 10 days notice before striking.
Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com.
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