News Track: Mercy Iowa City eliminates 20 jobs

BACKGROUND

IOWA CITY — Mercy Iowa City officials announced in December they were considering joining the UnityPoint Health network, which would allow the small Catholic hospital to operate more efficiently and gain access to larger insurance plans.

Mercy Iowa City, a 234-bed hospital, would retain its Catholic affiliation and would stay in Iowa City's Northside neighborhood, officials said in December.

WHAT'S HAPPENED SINCE

Although Mercy and UnityPoint signed a letter of intent to merge, hospital officials are still in talks about affiliation, officials said.

'At this point we are still in the due diligence phase,' UnityPoint spokeswoman Laura Rainey said in an email. 'We anticipate something more firm late May/June.'

UnityPoint, which provides care across Iowa, Illinois and Wisconsin, operates UnityPoint Health-St. Luke's Hospital in Cedar Rapids.

Meanwhile, Mercy Iowa City is eliminating 20 jobs this month to make up for fewer inpatient admissions, lower reimbursement rates and other financial challenges, according to an email that Interim President and Chief Executive Officer Mike Heinrich sent to employees.

'Although we do have areas of growth, including Mercy primary care clinics, the Emergency Care Unit and the Wound and Vein Center, other areas including most inpatient areas have experienced decreased activity,' Heinrich wrote. 'As a result, we will be implementing additional initiatives to improve efficiencies and reduce expenses.'

The full-time and part-time jobs to be cut are not in direct patient care, Mercy said. Some of the positions will be eliminated through attrition, while other employees have been alerted their jobs would be cut, Mercy spokeswoman Margaret Reese said.

'People have been notified or offered the opportunity to apply for other vacant positions,' she said. Mercy has about 1,440 full-time and part-time employees.

Mercy Iowa City, started by Catholic nuns in 1873, has struggled with low inpatient admissions for several years. The hospital's inpatient beds were about one-third full, on average, for 2014 and 2015, The Gazette reported in 2015. The hospital's 2016 license application with the Iowa Department of Inspections and Appeals showed the average daily census was 76.4 patients for 234 staffed beds. The average daily census was down to 67.21 patients in the 2017 report, filed in December.

Mercy Iowa City closed its 16-bed skilled nursing unit last June because of lack of demand. Although the unit was established in the 1980s, growth of nursing homes and rehab facilities reduced demand for Mercy's unit.

l Comments: (319) 339-3157; erin.jordan@thegazette.com