IOWA CITY — Mercy Iowa City is implementing staff reductions, furloughs and other polices for its employees in an effort to cope with the financial impact the hospital as faced in the midst of the ongoing COVID-19 pandemic.
The Iowa City-based health care system confirmed to The Gazette this past week it was implementing these cost-cutting measures as a result of the financial effects of the ongoing pandemic.
“The pandemic’s financial effects have been felt across hospitals in Iowa and the entire country. Mercy Iowa City is no exception, seeing an ongoing increase in costs and reductions in elective procedures,” spokesman Aaron Scheinblum wrote in a statement.
“To support the future of Mercy Iowa City and support our mission to continue providing high-quality care for our community, we made the difficult decision to transition some colleagues as part of our recovery efforts from these financial challenges.”
The health care system stated it was implementing “a limited reduction in staff across Mercy Iowa City hospital as part of our cost-reduction efforts.”
The statement did not clarify what the limited reduction in staff implied, nor did Scheinblum respond to The Gazette’s follow-up questions.
The Iowa City hospital also announced leadership pay reductions, temporary furloughs and paid-time-off forfeitures through June.
Mercy Iowa City, an affiliate of MercyOne health system, employs more than 900 full-time staff and nearly 200 part-time staff across its hospitals and clinics.
Hospital leadership laid off 29 employees from “a variety of non-specific areas of the hospital” in mid-November, again citing the revenue losses due to the pandemic.
The WARN notice of the layoffs filed with Iowa Workforce Development was filed days before hospital officials announced to its employees that it would close the hospital’s inpatient mental and behavior health unit by the end of 2020.
The unlocked inpatient unit, which staffed between 10 to 12 beds over the past year, saw its last patient by Nov. 1.
Like all hospitals across the state, the pandemic has had a major impact on Mercy Iowa City’s bottom line. When the first cases of COVID-19 first appeared in the state in March, all Iowa hospitals halted elective procedures — typically a health system’s biggest profit-makers.
The state’s hospitals were expected to lose up to $1.26 billion through the end of June as a result of mitigation measures around the pandemic, according to a cost analysis released by the Iowa Hospital Association earlier this year.
After a 395 percent decline in operating margins between March and April, the vast majority of Iowa’s hospitals were operating in the red, according to the analysis.
“Mercy Iowa City sincerely appreciates the hard work and commitment from all colleagues and providers in the response of the COVID-19 pandemic and beyond,” Scheinblum said in the statement.
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“We are committed to providing the best care for our patients during such challenging times, and we are hopeful these transitions will continue to keep Mercy Iowa City strong for our community.”
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