Mercy Springfield Communities President Dr. Alan Scarrow shared his thoughts about the health care provider’s recent layoffs in a July 1 blog post and a Mercy newsletter.
He said negative pressure on revenue and projected increases in service demands were factors behind
127 local layoffs and 347 across St. Louis-based Mercy’s four-state region.
“Continued implementation of cuts in the Affordable Care Act, cuts in Medicare reimbursement, a switch to value-based payments and lack of Medicaid expansion in Missouri are among many reasons that the Springfield Communities will see at least $30 million less revenue in the coming year, despite taking care of more patients,” Scarrow said in the post titled, “
The Hard Thing About Hard Things.”
According to Springfield Business Journal list research, Mercy Springfield Communities was the Queen City’s largest employer in 2014 with 9,030 employees across the five-county Springfield metropolitan statistical area and $1.57 billion in local revenue. By comparison, CoxHealth reported 7,916 employees and over $3.4 billion in revenue last year.
Locally, the layoffs announced last month have impacted operations throughout the region that includes Mercy Hospital Springfield, Mercy Clinic and five regional hospitals in Lebanon, Aurora, Cassville, Mountain View and Berryville, Ark.
In addition to the cuts, and as part of cost-saving measures, Scarrow said 100 managers kept their jobs, but had their positions reduced. Across Mercy’s footprint, about half of the layoffs were leadership roles, according to SBJ archives, with the majority of affected nonleader employees being nonpatient care positions.
“Less revenue forces us to find ways to reduce our costs if we are going to maintain the quality and breadth of service our community expects from us. Given that approximately 60 percent of all our costs are wages and benefits, it is no surprise that part of that cost reduction results in a loss of co-workers,” Scarrow said.[[In-content Ad]]
