'A real dark day'Mercy to cut 61 jobs in northwest Arkansas
Posted on Saturday, October 4, 2008
ROGERS — On Tuesday, Kennametal Inc. announced it would be closing its Bentonville manufacturing facility, which employs 120, by Dec. 31.
Then came the news that Gates Corp. would be cutting nearly 50 jobs at its facility on Lincoln Street in Siloam Springs.
On Friday, Jon Vitiello, chief operating officer for Mercy Health System of Northwest Arkansas, shouldered the responsibility of delivering news he and fellow administrators had hoped to avoid. Mercy announced it will be cutting 61 positions within its northwest Arkansas organization. Forty-one positions are full-time and 20 are part-time, according to Vitiello. “ This is a real dark day in our history at Mercy, ” Vitiello said.
As a part of the reduction, all positions within Mercy’s outpatient therapy services will be eliminated, according to a release issued Friday. Vitiello said the majority of those employees and services are housed at the Mercy Health Center facility on Arkansas Highway 102, next to Northwest Arkansas Community College. The pediatrics group and other services situated in that building will be unaffected. “ Mercy will be working diligently to transition the program and its patients to other local therapy programs. During that 30-day period, Mercy’s outpatient therapists will continue to work with these patients, ” Vitiello said.
According to Mercy, the reductions are necessary from a cost-control and financial-management standpoint. Vitiello said the continued increase in costs of providing health care, coupled with the fact that medical-service reimbursement levels are not keeping pace with the rising costs of providing those services has been festering for some time. But over the course of the past month, he said it became obvious the organization could no longer cope with those losses, even though he said traffic volume is up in nearly every area of Mercy Health System of Northwest Arkansas since the opening of its new Mercy Medical Center along Interstate 540 in Rogers. “ Medical-service reimbursement isn’t a new problem, but six to nine months ago, we weren’t thinking about making these cuts, ” Vitiello said. “ Three weeks ago, it became obvious something had to happen. Right now, there are no plans for additional cuts. We’ve hit the number we believe will be sustainable for us. ”
This announcement comes three months after Mercy Health System of Northwest Arkansas cut 43 jobs. According to a release issued in June, those cuts accounted for and affected some services, reduction in employee hours and attrition. It was also announced the Pea Ridge Medical Office and Mercy Family Medicine office in Bentonville would be closing at the end of the summer.
Taking this next step was something Vitiello and Mercy Corporate Executive Officer George Flynn said they had not anticipated making.
“ This is a very somber and difficult day at Mercy, ” Flynn said. “ We deeply regret that these reductions are necessary. Given the economic realities of the current health care environment, both nationally and within our own community, it’s our fiduciary duty to manage our business and financial position while remaining true to our mission in Northwest Arkansas. ”
According to Flynn, actual monetary reimbursements that Mercy receives in connection with the medical services it provides are not sufficiently aligned with the expenses of providing that care. At the same time, there has been a significant increase incurred by Mercy for charity care and absorption of bad debt in the form of uncompensated care. During the most recent fiscal year, the total costs incurred by Mercy for charity care and bad debt increased from $ 14. 1 million to $ 17. 9 million compared to the previous year, according to a release issued Friday.
“ Mercy as an entire organization is very stable financially, ” Vitiello said. “ We are because we have taken these painful shortterm steps for the benefit of the long-term. ”
“ I want to assure you that Mercy remains fully committed to our mission in northwest Arkansas, that of providing quality health care to the people and employers of this wonderful community, ” Flynn said. “ We understand that our co-workers, physicians and volunteers are part of a life-saving mission in partnership with our community and we will do everything within our power to honor that partnership as we move forward. ”
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